ICICI Direct's research report on Tata Metaliks
Tata Metaliks (TML) reported a steady operational performance in Q4FY21, aided by healthy pig iron prices. During the quarter, ductile iron (DI) pipe segment also reported highest ever quarterly deliveries. For Q4FY21, TML reported DI pipe sales volume of ~75000 tonnes, up ~38% YoY, ~73% QoQ. Pig iron sales volume for the quarter was at ~80000 tonnes, up ~1% YoY but down ~10% QoQ. Topline for the quarter was at Rs 661 crore, up 27% YoY, 26% QoQ. EBITDA for the quarter was at Rs 143 crore (up 19% YoY, 13% QoQ). PBT for the quarter was at Rs 124 crore, up 28% YoY, 14% QoQ while ensuing PAT was at Rs 75 crore (flattish YoY but down 3% YoY). PAT declined YoY on the back of relatively higher effective tax rate. Effective tax rate for Q4FY21 was at 39% vs. 20% in Q4FY20 and 31% in Q3FY21.
Outlook
We value the stock at 6x FY23E EV/EBITDA and arrive at a target price of Rs 1050 (earlier target price Rs 675). Hence, we maintain our BUY rating on the stock.
For all recommendations report, click here
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