Tata Chemicals posts 23% y-o-y rise in profit for January-March

By: | Published: May 19, 2018 4:20 AM

For the full year ended March 31, 2018, Tata Chemicals reported income from operations on consolidated basis of Rs 10,345 crore, with net profit at Rs 1,560 crore, a growth of 39%. T

tata chemicals, tata, chemicals, tata profitTata Chemicals MD Mukundan said as far as India was concerned, the company’s key businesses soda ash and salt continued to perform with healthy margins due to improved operational efficiencies despite stiff competition and higher input price.

Tata Chemicals on Friday posted a 23% year-on-year increase in its consolidated net profit to Rs 356 crore in the January-March quarter beating analyst consensus estimates from Bloomberg of Rs 238.4 crore. Consolidated net sales, however, remained flat at Rs 2,555 crore on a y-o-y basis, and below analyst estimates of Rs 2,959 crore. The company management said US operations continue to perform better on the back of improved production and sales volumes, along with better utilisation and efficiency. However, one-off impact on performance include actuarial gain on changes to post retiral medical plans and recent changes in tax legislation. The company’s consolidated ebitda (earnings before interest, tax, depreciation and amortisation) increased by over 8% to Rs 512 crore, while the operating margins improved by 200 basis points to 20%.

Speaking to newspersons at an earnings conference, John Mulhall, chief financial officer, Tata Chemicals, said despite the slightly down revenues, the quality of earnings has improved significantly. Tata Chemicals’ European operations are back on track after some operational disturbance earlier this year. Also, Magadi operations reported higher sales volumes, better operational efficiency and sales realisation.

R Mukundan, managing director, Tata Chemicals, said as far as India is concerned, the company’s key businesses soda ash and salt continued to perform with healthy margins due to improved operational efficiencies despite stiff competition and higher input price. “Tata Salt recorded highest ever production volumes. We continue to expand our consumer portfolio. We recently launched three new products and also launched organic pulses.”

He added: “Our target for consumer business over the next 3-4 years is to hit the Rs 5,000-crore mark but a lot depends on the expansion of stores.” He said the urea transaction consummated with a profit before tax of Rs 1,279 crore reported as an exceptional item and a one-time income. “Phosphatic fertiliser business has been classified as discontinued operations,” he said.

With this, Mukundan said the company would have exited the fertiliser business, which was part of the strategic reconfiguration of the business. At the same time, he said the company is in advanced stages of acquiring the silica business and is on time with its investments to build a plant in Nellore for nutraceutical business with Rs 270-odd crore.

As for the capex guidance for FY19, Mukundan said the company has a normal range of Rs 500 crore but will trend higher than that because of the additional investment in nutraceutical plant. In the coming year, the company will have three strong drivers for revenues — consumer business, speciality business and industrial chemicals business.

For the full year ended March 31, 2018, Tata Chemicals reported income from operations on consolidated basis of Rs 10,345 crore, with net profit at Rs 1,560 crore, a growth of 39%. The company’s consolidated net debt was down from Rs 5,573 crore in March 2017 to Rs 1,860 crore as on March 31, 2018.

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