Tata Chemicals Q3 Results: Net profit drops 60% amid lower soda ash volumes, misses analysts' estimates

Tata Chemicals (TATACHEM) on Monday reported a consolidated net profit of Rs 158 crore for the October-December period, a 60.3 per cent decline compared with the corresponding quarter a year ago. 

The Mumbai-based chemicals manufacturer reported revenue of Rs 3,730 crore for the fiscal third quarter, down 10.1 per cent on a year-on-year basis owing to lower soda ash volumes and pricing pressure across regions, according to a regulatory filing. 

The Tata group chemical company registered Rs 542 crore in quarterly earnings before interest, taxes, depreciation and amortisation (EBITDA) on a consolidated basis, as against Rs 922 crore a year ago. Tata Chemicals said the quarterly EBITDA was impacted due to volume and price pressures across regions.  

According to Zee Business research, Tata Chemicals' quarterly net profit was estimated at Rs 265 crore, revenue at Rs 3,820 crore and EBITDA at Rs 750 crore.

Revenue from the Tata group company's basic chemistry products and specialty products units dropped 10.7 per cent and 7.0 per cent to Rs 3,101 crore and Rs 629 crore, respectively, according to the filing. 

“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 the Americas, which led to a pressure on volumes 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 CEO, Tata Chemicals.

"Our focus will also be to deliver capital investment projects on time, conserve cash and continue to deleverage. 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," Mukundan added. 

The company said its gross debt stood at Rs 5,912 crore, as of December 31, 2023.   

Tata Chemicals shares ended 1.8 per cent lower at Rs 980 apiece on BSE ahead of the earnings announcement.

Tata Chemicals shares: Past performance

As of February 2, Tata Chemicals shares had grown 2.9 per cent in the past year, sharply underperforming a 22.4 per cent rally in the headline Nifty50 index.

During the fiscal third quarter, the chemical stock gained 7.1 per cent while the Nifty50 rose 10.7 per cent.

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