Srikalahasthi Pipes, which makes ductile iron pipes used mostly for transporting water, has reported a 142 per cent increase in its net profit for the quarter ended December 2014. This has been possible due mainly to the sintering plant the company began operating in January 2014, which enabled it to use cheaper iron ore fines rather than lumps as raw material.

Falling prices of iron ore, coal, and improvements in operating efficiency also helped.

Iron ore fines are 40 per cent cheaper than lumps, but a sintering plant compacts them into lumps so that they can be melted in blast furnaces. Srikalahasthi Pipes, formerly, Lanco Industries Ltd, set up one such plant of 1,000 tonnes-a-day capacity last year. In the quarter ended December, the plant worked to full capacity.

Gouri Shankar Rathi, Director, Srikalahasthi Pipes, told BusinessLine today that the company also produced a larger number of small diameter pipes, 100 mm to 300 mm, for which there is better demand and less competition.

On the NSE on Friday, the share price of Srikalahasthi Pipes (NSE: SRIPIPES) closed at Rs 90, slightly lower than the 52-week-high of Rs 93 that the share reached on Thursday. The 52-week-low was Rs 21.60 recorded on February 3, 2013.

For the nine months ended December 2014, Srikalahasthi Pipes, part of the Electrosteel group, achieved a net profit of Rs 52.55 crore, up from Rs 22.09 crore for the same period of the previous year — a 137 per cent increase.

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