Tata Chemicals Q1 results: Net profit falls 71.8% to ₹ 150 crore, revenue down over 10%

BENGALURU (Reuters) – Indian chemicals maker Tata Chemicals reported on Monday a 71.8% drop in first-quarter profit, hit by lower soda ash prices and weaker demand.

Consolidated net profit fell to 1.5 billion rupees ($17.9 million) in the quarter ended June 30 from 5.32 billion rupees a year earlier.

Operating income fell over 10% to Rs 37.89 billion in the quarter.

Key Context

China’s economic crisis and reduced EU demand for glass products are causing oversupply in Asia and the EU, driving down soda ash prices. Analysts say recovery could take 12-18 months.

Tata Chemicals had cut prices in November last year due to increasing competition, which, coupled with weaker demand, hit the company’s financial results.

The company’s core business segment is the production of soda ash.

COMPARISON WITH PEERS

Valuation Estimates (Next 12 Analyst Sentiments)

RIC PE EV/EBI Revenue Profit Average shares per Div.

TDA growth growth rating* analysts price performance

Tata Chemicals 28.36 11.83 3.49 -5.94 Sell 7 1.24 1.38

Deepak Nitrite 39.75 25.70 13.43 30.14 Hold 15 1.23 0.24

SRF 42.05 22.85 14.88 23.13 Hold 25 1.08 0.29

GHCL 8.62 4.96 5.81 NULL Hold 1 1.16 1.91

* Average analyst ratings normalized to a scale of Strong Buy, Buy, Hold, Sell and Strong Sell

** Ratio of the stock’s last close to the average analyst target price; a ratio above 1 indicates the stock is trading above PT STOCK PERFORMANCE APRIL-JUNE

(1 dollar = 84.0390 Indian rupees)

(Reporting by Yagnoseni Das in Bengaluru; Editing by Mrigank Dhaniwala)