Tata Metaliks Q2 net up 7% to Rs 22 cr

Tata Metaliks Managing Director Sanjiv Paul said the firm is going through a challenging external environment in terms of very high coal and coke prices, stagnation of demand in the market and liquidity issues with most of the infrastructure players.

"However, efforts are being made to improve realisations, reduce costs and improve quality further to deliver value to the customer of pig iron and DI pipes. As a result of increased DI pipe capacity, customer deliveries of higher value smaller sections of pipes have improved," he added.

Company is also planning to modernise and expand one of its blast furnaces through a proposed 70 days shut-down in Q3 2016-17, date of which will be finalised shortly, Paul said.

Post this modernisation, along with stabilisation of newly commissioned coke and power plant, the medium to long term cost competitiveness of the company would further improve, he added.

Global price of imported coal increased by 130 per cent and that of imported coke by 50 per cent during Q2 2016-17. On the other hand, price realisation of pig iron dropped by 5 per cent in Q2 2016-17 as compared to Q1 2016-17, the firm said.

"Outlook for Q3 2016-17 for pig iron business appears to be challenging as the coal and coke prices have increased very significantly and product prices are not increasing in the same proportion due to low demand of pig iron," it said.

However, full commissioning of coke plant and captive power plant projects in Q3 would enhance company's cost competitiveness, Tata Metaliks added.