Buy Tata Metaliks; target of Rs 875: Centrum

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26 Aug, 2025 12:21

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Centrum's research report on Tata Metaliks

Net sales stood at Rs 4.5bn, up 39% YoY and was led by strong volume growth in the DI pipe segment at 23% YoY to 46kt in a seasonally weak quarter which also had adverse impact of GST. Pig iron sales normalised after GST rollout and better production from new blast furnace and stood at 82kt, up 23% YoY and 53% QoQ.

Outlook

We expect EBITDA/PAT CAGR of 26%/37% during FY17-19E, led by volume growth coupled with cost efficiencies and economies of scale resulting in higher margins and solid return ratios. We continue to value TML on our conservative AOCF/EV yield methodology and maintain Buy with a revised TP of Rs 875. Key risk is margin pressure due to forex losses & raw material volatility.

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