ICICI Direct: Tata Chemicals’ Q1 Revenue Dragged By Poor Soda Ash Sales Volume In U.S. And Magadi 

ICICI Direct Report

Tata Chemicals Ltd. reported a fall in revenue of 9% YoY to Rs 2348 crore, largely dragged by poor soda ash sales volumes from U.S. and Magadi regions.

Basic chemical revenue from the U.S. fell 26.7% YoY to Rs 619 crore while the same from Magadi remained at Rs 100 crore (down 20.6% YoY). Revenue from India fell 5.1% YoY to Rs 637.3 crore, largely assisted by a change in the product mix towards high value products.

The realisation growth from India business was at 29.8% YoY to Rs 45,850 per tonne. The basic chemical revenue from the Europe region was up 2.9% YoY to Rs 316 crore.

Lower gross margins (down 771 basis points YoY) dragged operating profit margin, which contracted 461 basis points YoY to 15.3% leading to Ebitda de-growth of 30% YoY to Rs 360 crore.

In terms of geography-wise break up in the basic chemical segment, operating profit margin for India fell 184 basis points YoY to 27.7% while North America and Magadi fell 1,671 basis points YoY and 587 basis points YoY to 5.7% and 10%, respectively.

On the other hand, Europe margins rose 300 basis points YoY to 8.9%. Profit after tax was down 91% YoY to Rs 13.3 crore, impacted by subdued operational performance and lower other income (down 32% YoY), higher finance cost (up 25% YoY) and depreciation (up 17% YoY).

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