Tata Chemicals share price jumps over 13% on strong June quarter earnings – what should investors know?

Tata Chemicals share price: Shares of Tata Group chemical company – Tata Chemicals surged over 13 per cent to touch the day’s high level of Rs 1,086 per share on the BSE and NSE intraday on Wednesday’s session amid strong June quarter earnings in the financial year 2022-23 (Q1FY23). 

Tata Chemicals’ consolidated PAT (Profit After Tax) from continuing operations for the June quarter surged nearly two-fold YoY to around Rs 641 crore due to better material margins, lower other expenses, and reduced employee expenses as a percentage of sales.

Similarly, it posted overall revenue at Rs 3,995 crore in 1QFY23, up 34 per cent year-on-year (YoY); while EBITDA (earnings before interest, taxes, depreciation, and amortization) margin surged 520 basis points YoY to 25.4 per cent and EBITDA at about Rs 1,015 crore, up 69 per cent YoY

The operating performance reflects improved realisations, efficient cost management, and optimum capacity utilization in challenging market conditions, and in the context of rising input and energy costs, Tata Chemicals said in its results filing on Tuesday.

While this positive momentum is expected to continue in the near to medium term, the input side environment especially energy remains at elevated levels coupled with logistic challenges that continue to be seen in the market, the management said in its commentary.

“We continue our long-term focus on excellence by leveraging digitalization and sustainability. In addition to operational excellence, we continue to focus on executing growth capex,” R. Mukundan, Managing Director & CEO, Tata Chemicals Ltd., said in his earnings comment.

The stock is trading near its 52-week high mark of Rs 1158 per share, hit on October 18, 2021, while it had touched a 52-week low of Rs 773.9 per share on July 01, 2022.

At around 12:52 PM, the stock is trading up over 13 per cent to Rs 1083 per share on the BSE as well as NSE as compared to 0.11 and 0.06 per cent fall in the S&P BSE Sensex and Nifty.