Operating Context
We are committed to identifying and capitalising on emerging opportunities in the Water Infrastructure sector to maintain our growth trajectory. We remain focused on monitoring these opportunities, which are critical to our business and growth aspirations, to ensure that we stay agile in responding to changing market dynamics.
India has reinforced its position as the
fastest-growing major economy in the
world, with a growth rate of 7.2% in
FY 2022-23. To sustain this economic
growth, the Indian Government has
implemented various measures, including
increasing public spending, promoting
foreign investment and implementing
reforms to improve the ease of doing
business in India.
We closely monitor the evolving trends in the global metals and mining landscape to shape our path forward. Our Leadership takes note of these global developments to refine our operational strategies. Through our operational roadmap, we prioritise sustainable growth and value creation to achieve our strategic imperatives.
The World is currently experiencing a significant digital transformation that utilises new technologies to improve existing business and industry practices. The metal and mining industry has been an early adopter of digital technologies to create new opportunities, increase efficiency, enhance the quality of products and improve profitability.
At Tata Metaliks, we take pride in our responsible and prompt adoption of technological advancements. We embarked on a digital transformation journey and developed a long-term digital strategy roadmap. This is being implemented through automation in our operations and processes and through several data analytics projects to improve efficiencies and unlock the values across all the enterprise-level processes.
Demand for PI remained subdued throughout the year, with prices experiencing downward corrections. The overall buying sentiment was weak due to the volatility in raw material prices, resulting in foundries operating at only 50-60% capacity. Market experts expect the prices of Pig Iron to remain volatile or report a slight downtrend considering negligible improvement in demand in the prevailing prices and declining prices of raw materials such as Coking Coal and Iron Ore, globally.
We produced 5.6 lakh tonnes of Hot Metal this year, out of which 3 lakh tonnes were value-added into DIP while the balance was cast into PI. Our focus will remain to expand our PI market share in our chosen market of Eastern India by providing superior quality, differentiated products catering to customised needs of our customers, coupled with timely delivery to reinforce Tata eFee as the leader in the PI industry.
The Indian DI Pipe demand is projected to grow at a high CAGR of 13-15% during the next five years due to significant Government investment in water infrastructure projects. As a result of its exceptional dependability and high lifespan, DI pipe is the most preferred Material of Construction (MOC) for water infrastructure projects.
We are in our last leg to more than double our production capacity in DI Pipes and are focused to increase our market share with differentiated and superior product and service offerings which will propel the revenue share of DI Pipe in our overall revenue stream going forward.
India’s water scarcity is indeed a major challenge for the country’s sustainable development due to over-dependence on groundwater. Its depletion has severe consequences for both the environment and human health. Through the Jal Jeevan Mission, the government aims to provide piped water to every household. The Union Budget FY2022-23 has increased focus on water and irrigation, with an allocation of ₹862 billion towards the Ministry of Jal Shakti, which is a positive step towards addressing India’s water scarcity challenge. The creation of the National Interlinking of Rivers Authority (NIRA) will facilitate the planning, investigation, financing and implementation of river interlinking projects.
Our business operates in a sector that is crucial to India’s socio-economic progress and we are confident that our long-term growth drivers remain strong. To align with our strategic priority of ‘Focus on Downstream/Value-add,’ we are expanding our DIP business at a rapid pace.
Currently, Environmental, Social,
and Governance (ESG) has become
an
all-pervasive term, owing to its
significant impact on corporate decision-making.
Investors, consumers, and
workers seek business/employment
with companies that align with their
values, prioritising ESG policies. These
policies allow organisations to assess
their impact on climate change and
the community in which they operate,
ensuring that their business decisions
promote Sustainability.
In recent years, we have taken several initiatives that have not only improved our ESG performance but also enhanced the lives of the communities we serve. We regularly calibrate our interventions in our Sustainability journey through external voluntary assessments by leading institutes and independent agencies, internal benchmarking studies of ESG practices to adopt the best practices and materiality assessments.