Augmenting DI capacity to cater to rising demand Fortunes of the DI pipes segment are closely linked to the investment in water, sanitation and irrigation projects across the country. Over the last five years, DI pipes demand has grown at ~8% CAGR. Going forward also, on the back of a significant increase in government allocation on water infrastructure, the demand for DI pipes is expected to grow at a steady pace in the next five years. Driven by notable investment planned by the government, Tata Metaliks is planning to expand its DI pipe making capacity...

Tata Metaliks (TML) delivered steady performance in Q1 despite few unscheduled shutdowns and EBITDA stood at ~Rs660mn, up 33% YoY but lower than our expectations by ~8% with the miss being completely driven by shutdown impact (~Rs70mn). We continue to maintain our positive view on TML as its DI pipe business boasts of an industry leading cost structure, solid demand drivers and strong entry barriers. With expected recovery in spreads in FY19E and commissioning of PCI project by Q4FY19E coupled with several other productivity improvement initiatives, TML is expected to continue delivering steady earnings growth over...

Tata Metaliks (TML) delivered in line performance in Q2 as the positive impact of strong volumes mitigated the headwinds of subdued spreads and overall weak market conditions. We continue to maintain our positive view on TML as its DI pipe business boasts of an industry leading cost structure, solid demand drivers and strong entry barriers. With complete stabilisation of growth-accretive and cost efficient projects offering quick paybacks and expected recovery in spreads from H2FY18, TML is set to take the next leap in profitability and deliver EBITDA/PAT CAGR of 26%/38% over FY17-19E. Despite the consistent up move in the stock in last...