Tata Chemicals Q2 Results: Profit Tumbles 46% But Beats Estimates

Tata Chemicals Ltd.'s consolidated net profit in the second quarter of the current financial year declined 46% but beat analysts' estimates.

The company posted a profit of Rs 267 crore in the quarter ended September in comparison to Rs 495 crore in the year-ago period, according to an exchange filing on Thursday. Analysts tracked by Bloomberg had estimated a profit of Rs 231 crore.

• Revenue flat at Rs 3,999 crore versus Rs 3,998 crore (Bloomberg estimate: Rs 3,994 crore).

• Net profit down 46% to Rs 267 crore versus Rs 495 crore (Bloomberg estimate: Rs 231 crore).

• Ebitda down 25% to Rs 618 crore versus Rs 819 crore (Bloomberg estimate: Rs 647 crore).

• Margin contracted to 15.5% versus 20.5% (Bloomberg estimate: 16.2%).

The company announced stable demand across all end-use industries in India for the second quarter. It reported robust demand for flat, container, and solar glass. However, imports during the same period declined, according to its investor presentation.

In contrast, demand in America decreased, while Europe experienced muted demand. Despite these challenges, Tata Chemicals reported a revenue increase of 6% in the quarter on a sequential basis, driven by higher volumes and realisations of soda ash. Additionally, Ebitda rose 8% during July-September period from the preceding quarter, primarily due to improved margins in the US, Kenya, and Rallis.

The company noted that net debt was higher than last year, attributed to lower Ebitda, increased working capital in the US, UK, and India, and the capitalisation of leases.

“Overall demand for soda ash, in India was stable, while some segments like container glass in Americas and Europe experienced muted demand. Unprecedented heavy rains in July and August impacted Mithapur operations leading to lower production as compared to the previous quarter, thus impacting margins," said Tata Chemicals' Chief Executive R Mukundan.

"However, the company’s overall performance was better as compared to previous quarter due to higher sales volume, coupled with higher realization of soda ash. Our focus is on customer engagement and stable operations, while ensuring steady contribution margins with a focus on costs. We continue to work with our customers and other stakeholders on our sustainability and digitisation efforts,” he added.

Shares of Tata Chemicals closed 2.41% lower at Rs 1,073.85 apiece on the NSE, compared to a 0.89% decline in the benchmark Nifty 50.