India's Tata Chemicals posts Q2 profit drop as soda ash prices slip, freight costs rise

Reuters

India's Tata Chemicals posts Q2 profit drop as soda ash prices slip, freight costs rise

17Out20241140 GMT

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Oct 17 (Reuters) -India's Tata Chemicals TTCH.NS reported a near 55% year-on-year fall in its second-quarter profit on Thursday, hurt by lower soda ash prices and higher freight costs.

The chemical maker's consolidated net profit fell to 1.94 billion rupees ($23.1 million) for the quarter ended Sept. 30 from 4.28 billion rupees a year earlier.

While revenue from operations rose 0.03% to 39.99 billion rupees for the quarter, total expenses rose nearly 7% to 38.03 billion rupees, with freight and forwarding charges rising nearly 32%.

For further results highlights, nL8N3LT0UA

KEY CONTEXT

An economic downturn in China and stagnant demand in the EU have hit prices of soda ash, which is the primary business segment for Tata Chemicals.

Globally, soda ash prices fell nearly 23% during the quarter, according to analysts at brokerage Nirmal Bang.

Tata Chemicals had cut soda ash prices last November.

Analysts had flagged that chemical companies could face higher expenses due to an increase in container and freight costs amid the Middle East crisis.

PEER COMPARISON

		Valuation (next 12 months)		Estimates (next 12 months)		Analysts' sentiment
	RIC	PE	EV/EBITDA	Revenue growth	Profit growth	Mean rating*	No. of analysts	Stock to price target**	Div yield (%)
Tata Chemicals	TTCH.NS	28.85	12.41	4.69	3.51	Sell	7	1.27	1.36
Deepak Nitrite	DPNT.BO	35.40	22.99	14.05	28.30	Hold	16	0.99	0.26
SRF	SRFL.NS	36.54	20.44	15.14	27.81	Hold	26	1.00	0.31
GHCL	GHCH.NS	8.55	4.85	7.03	NULL	Buy	1	NULL	1.91