India's Tata Chemicals posts Q1 profit drop on lower soda ash prices

SRF

05/08/2024 12:06

BENGALURU, Aug 5 (Reuters) - Indian chemicals maker Tata Chemicals  TTCH.NS  reported a 71.8% fall in
its first-quarter profit on Monday, hurt by lower soda ash prices and subdued demand.
    Consolidated net profit fell to 1.5 billion rupees ($17.9 million) for the quarter ended June 30 from 5.32
billion rupees a year earlier. 
    Revenue from operations fell more than 10% to 37.89 billion rupees for the quarter.
    For further results highlights, (nFWN3JS0TZ)

KEY CONTEXT
    China's economic slump and decreased EU demand for glass products are causing an oversupply in Asia and the
EU, lowering soda ash prices. Recovery may take 12-18 months, according to analysts.
    Tata Chemicals slashed prices last November amid rising competition, and combined with weaker demand, this
has hurt its bottom line. 
    Soda ash constitutes the company's primary business segment. 

    PEER COMPARISON
                                   Valuation     Estimates (next 12         Analysts' sentiment         
                                   (next 12           months)                                           
                                    months)                                                             
                      RIC        PE     EV/EBI  Revenue     Profit    Mean     # of      Stock to       Div
                                        TDA     growth      growth    rating*  analysts  price          yield
                                                                                         target**       (%)
 Tata Chemicals        TTCH.NS   28.36   11.83     3.49      -5.94    Sell            7      1.24           1.38
 Deepak Nitrite        DPNT.BO   39.75   25.70    13.43      30.14    Hold           15      1.23           0.24
 SRF                   SRFL.NS   42.05   22.85    14.88      23.13    Hold           25      1.08           0.29
 GHCL                  GHCH.NS    8.62    4.96     5.81       NULL    Hold            1      1.16           1.91
    * Mean of analysts' ratings standardised to a scale of Strong Buy, Buy, Hold, Sell, and Strong Sell
    ** Ratio of the stock's last close to analysts' mean price target; a ratio above 1 means the stock is
trading above the PT
 
 APRIL- JUNE STOCK PERFORMANCE
    


($1 = 84.0390 Indian rupees)

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Tata Chemical April-June stock    https://tmsnrt.rs/3WAgtx6
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 (Reporting by Yagnoseni Das in Bengaluru; Editing by Mrigank Dhaniwala)
 ((Yagnoseni.Das@thomsonreuters.com; +91 6001289066;))