Tata Metaliks stock gains despite weak Q3 earnings; here’s why

Shares of Tata Metaliks gained 3% today despite the Tata Group firm reporting a sharp fall of 73 per cent in the December quarter profit. Net profit fell to Rs 9.48 crore, on account of increased expenses. The company logged a Rs 35.65 crore net profit in the year-ago period. Despite weak Q3 show, sentiments toward the stock were positive after Morgan Stanley Asia bought about 1.98 lakh shares of Tata Metaliks via the open market at Rs 834.67 per share. Tata Metaliks shares rose 3.02 per cent intraday to Rs 857.8 against the previous close of Rs 832.65 on BSE. 

Tata Metaliks stock opened lowered at Rs 825 today. Tata Metaliks shares have gained after two days of consecutive fall. The stock has slipped 1.06 per cent in a year and gained 6.94 per cent in 2022. Total 0.28 lakh shares of the firm changed hands amounting to a turnover of Rs 2.37 crore on BSE. Market cap of the firm rose to Rs 2,699 crore. 

In technical terms, the Tata Metaliks stock has a relative strength index (RSI) of 59.3, signaling neither the stock is overbought nor oversold. The stock has a one-year beta of 0.9, indicating low volatility during the period. The shares of Tata Steel's subsidiary were trading higher than the 5 day, 20 day, 50 day, 100 day and 200 day moving averages.

Tata Metaliks’ total income climbed to Rs 792.43 crore in Q3 from Rs 693.12 crore during the October-December period of the previous year. Total expenses rose to Rs 780.18 crore in the December quarter as against Rs 642.83 crore a year ago.

Alok Krishna, Managing Director of Tata Metaliks said: "Pig Iron business was adversely affected by weak health of one of the blast furnaces which had frequent shutdowns and increased costs. The blast furnace has been repaired in early December 2022."

The new ductile iron pipe plant has been ramping up well with volumes increasing quarter-on-quarter and higher volumes are expected to come from it in the fourth quarter.

Tata Metaliks is a subsidiary of Tata Steel and has its state-of-the-art manufacturing plant at Kharagpur, West Bengal which produces pig iron and ductile iron pipes. The plant's annual hot metal production capacity is 500,000 tonne out of which 200,000 tonne is converted into Ductile Iron (DI) pipes and 300,000 tonne into pig iron.

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