Tata Chemicals Q3 Results: Profit Falls 54%, Misses Estimates
The soda ash manufacturer's profit dropped to Rs 194 crore in the October-December quarter, in comparison with Rs 425 crore in the year-ago period.
Tata Chemicals Ltd.'s net profit declined 54% in the third quarter of fiscal 2024, missing analysts' estimates.
The soda ash manufacturer's profit dropped to Rs 194 crore in the October-December quarter, in comparison with Rs 425 crore in the year-ago period, according to its exchange filing issued on Monday. That compares with the Rs 283.1-crore consensus estimate of analysts tracked by Bloomberg.
Tata Chemicals Q3 FY24 Highlights (Consolidated, YoY)
Revenue down 10.1% at Rs 3,730 crore vs Rs 4,148 crore (Bloomberg estimate: Rs 3,824.6 crore).
Ebitda dropped 41.2% to Rs 542 crore vs Rs 922 crore(Bloomberg estimate: Rs 732 crore).
Margin narrows 769 bps to 14.5% vs 22.2%.
Net profit down 54.4% at Rs 194 crore vs Rs 425 crore (Bloomberg estimate: Rs 283.1 crore).
Key Highlights
Revenue for the quarter was down due to lower volume in soda ash and pricing pressure in all regions. Ebitda was also impacted due to volume and price pressure across regions.
Company’s gross debt, as on Dec. 31, 2023, reduced to Rs 5,912 crore.
U.S. volume was lower by 80,000 MT due to plant shutdown and rail car shortage, which led to lower absorption and increase in fixed costs during the quarter.
Rallis’ domestic business registered volume growth, with overall business registering good improvement in margin. Rallis’ international business, though, is facing some challenges, it said.
“The demand environment for soda ash in our domestic markets as well as international markets was challenging during the quarter. This was especially so in the container glass and flat glass sectors in Europe and Americas, which led to a pressure on volume and prices. Our endeavour is to continue to maintain our market share through customer engagement and have steady contribution margins with focus on costs and higher value-added products, said R Mukundan, managing director and chief executive officer at Tata Chemicals.
The focus will also be to deliver capital investment projects on time, conserve cash and continue to deleverage, he said. "In the short-term, current demand-supply situation is likely to persist, but should improve and stabilise over the long-term, driven by growth sectors based on sustainability trends.”
Shares of Tata Chemicals closed 2.04% lower at Rs 977 apiece, as compared with a decline of 0.38% in the benchmark Nifty 50 on Monday.
