India's Tata Chemicals posts Q2 profit drop as soda ash prices slip, freight costs rise
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 |
* 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
JULY-SEPTEMBER STOCK PERFORMANCE
($1 = 84.0270 Indian rupees)
Tata Chem Sept Qtr 2024 vs Peers https://tmsnrt.rs/3Npywlp
Reporting by Ashish Chandra in Bengaluru; Editing by Mrigank Dhaniwala
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