Tata Chemicals Shares Dip Post Weak Q3 Financial Performance

Tata Chemicals' stock faced a downturn on Tuesday following the company's release of its third-quarter financial results, which did not live up to market expectations. The shares of the Mumbai-based chemical firm fell by up to 4.4% to INR 935.3 each on the National Stock Exchange (NSE), marking a continued decline for the fourth consecutive trading session.

By mid-morning, the shares were trading slightly down by 0.2% at INR 977.1 per share.

Tata Chemicals Q3 Financials

The company's performance for the October-December quarter was unveiled post market hours on Monday. The reported consolidated net profit plummeted by 60.3% year-on-year to INR 158 crore. This was a drop from the profit figures of the same quarter in the previous year.

Tata Chemicals also saw a decline in its quarterly revenue by 10.1% to INR 3,730 crore. This slump was attributed to reduced volumes of soda ash and pricing pressures experienced across various markets.

The earnings before interest, taxes, depreciation and amortisation (EBITDA) also witnessed a decrease, coming in at INR 542 crore compared to INR 922 crore from the year-ago period. This was impacted by the same volume and pricing pressures.

Expectations from various analysts had predicted that Tata Chemicals' net profit would be INR 265 crore, with a revenue of INR 3,820 crore, and an EBITDA of INR 750 crore.

The segments of basic chemistry products and specialty products within the company showed revenue reductions of 10.7% and 7.0%, with numbers falling to INR 3,101 crore and INR 629 crore, respectively.

Management's Outlook

R Mukundan, the Managing Director and CEO of Tata Chemicals, commented on the difficult market conditions that affected soda ash demand domestically and internationally. This was particularly noticeable in the container glass and flat glass sectors in Europe and the Americas. He emphasized the company's focus on maintaining market share and margin contributions through customer engagement, cost management and an increased effort towards higher-value products.

Historical Share Price Movement

On February 6, a view of Tata Chemicals' share price performance over the past year showed a decline of over two percent, contrasting with the Nifty50 index's 23 percent surge. However, during the third fiscal quarter, Tata Chemicals' stock did rise by 7.1 percent while the Nifty50 increased by 10.7 percent.

shares, pressure, earnings