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Buy Tata Metaliks; target of Rs 675: ICICI Direct

ICICI Direct is bullish on Tata Metaliks recommended buy rating on the stock with a target price of Rs 675 in its research report dated October 22, 2020.

October 22, 2020 / 04:00 PM IST
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ICICI Direct's research report on Tata Metaliks

Tata Metaliks (TML) reported a healthy set of Q2FY21 numbers. Pig iron reported sales volume of 85684 tonnes, up 12% YoY 167% QoQ. Ductile iron reported sales volume of 48908 tonnes, up 80% QoQ but down 13% YoY. The YoY decline in sales volumes of ductile iron pipe was on account of delays in project sites arising out of Covid impact. The company reported a topline of Rs 520 crore, up 2% YoY and 148% QoQ while EBITDA came in at Rs 109 crore vs. Rs 41 crore in Q2FY20 and Rs 10 crore in Q1FY21. EBITDA margin came in at 21.1% compared to 8.0% in Q2FY20, 4.9% in Q1FY21. Ensuing PAT came in at Rs 82 crore, up 248% YoY.


We value the stock at 6x FY22E EV/EBITDA and arrive at a target price of Rs 675. Hence, we assign a BUY rating to the stock. Key risk to our call is a significant increase in raw material costs and lower-than-expected increase in demand for DI pipes.

For all recommendations report, click here

Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on are their own, and not that of the website or its management. advises users to check with certified experts before taking any investment decisions.

Broker Research
first published: Oct 22, 2020 04:00 pm

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