Srikalahasti Pipes Ltd has posted a lower net profit of Rs 36.43 crore for the first quarter ended June 30, 2017 against Rs 42.96 crore in the corresponding quarter last year.

The company's income for the first quarter was however up at Rs 440.49 crore against Rs 286.56 crore in the same quarter last year.

During the last fiscal ended March 31, 2017, the company had registered a net profit of Rs 140.23 crore and an income of Rs 1203.40 crore.

GS Rathi, Wholetime Director, in a statement infomed the BSE, “The capacity of ductile iron pipes plant has been fully stabilised and the company has started getting full benefits of the increased capacity. The company is in the process of working on organic and inorganic growth plans for the future.”

Rathi said volatility of global coal prices is a cause for concern for the industry. During the quarter under review, the company had to consume higher cost coal, which has taken a toll on the profitability.

However, with enhanced production of blast furnace, full utilisation of DI pipe plant capacity and the benefits from cost reduction measures, the company was able to bring down the impact of higher input cost.

Third furnace

The company proposes to install a third furnace exclusively for smaller dia pipes, which will reduce oil consumption considerably.

Further, in view of the demand for higher dia ductile iron pipes, the company intends to take necessary steps for creating production facilities for 1,200 mm dia pipes as well.

Due to the Government's focus on improving water infrastructure and irrigation sector, the demand for ductile iron pipes is expected to be robust.

Referring to expansion, Rathi said installation of additional coke oven battery and boiler in captive power plant for expansion of capacity is moving ahead as per schedule and expected to be in place by first quarter of FY 2018-2019.

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