Tata Chemicals Q1 results: Net profit plunges 71.8% to ₹150 crore, revenues fell more than 10%

BENGALURU (Reuters) - Indian chemicals maker Tata Chemicals 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.

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 28.36 11.83 3.49 -5.94 Sell 7 1.24 1.38

Deepak Nitrite 39.75 25.70 13.43 30.14 Hold 15 1.23 0.24

SRF 42.05 22.85 14.88 23.13 Hold 25 1.08 0.29

GHCL 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)

(Reporting by Yagnoseni Das in Bengaluru; Editing by Mrigank Dhaniwala)