Tata Chemicals Ltd (TCL) has posted a 42.7 per cent increase in net profit to Rs 48.53 crore for the first quarter ended June 30, 2003 as against Rs 34.01 crore during the corresponding period previous fiscal.

However, net sales was lower by 5.7 per cent from Rs 326.64 crore to Rs 307.90 crore during the quarter under review.

Decline in net sales has been attributed to the company’s decision to rephase its urea sales in line with the agricultural season. Consequently, sales of urea have reduced during first quarter ended June 2003 and stock-in-trade has shown an increase when compared to first quarter ended June 2002. The company is confident that this decision will have a positive effect on financial performance in the long term, and a normal monsoon will contribute to improved sales in the forthcoming quarters.

Commenting on the result, TCL managing director Prasad Menon said, "Over the just concluded quarter, we have maintained steady progress towards achieving our stated objectives across all our key businesses. This has been achieved through a judicious mix of enhanced operational efficiencies, efficient financial management and innovative marketing strategies, all of which strengthen my confidence in our ability to retain our leadership position and continually deliver value for all our stakeholders."

During the first quarter 2003-04, the company also concluded a
$20 million ECB at a fine rate of LiBOR + 100 basis points as part of its continuing capital efficiency programme, signifying its status as a premium borrower.

Said TCL chief financial officer PK Ghose, "The enhancement of operating efficiencies has been achieved though implementation of Project Manthan and utilising alternative cost competitive inputs. Continued enhancement of operational and marketing efficiencies are expected to further strengthen the company’s position in the inorganic chemicals and salt business. The company will continue exploring both inorganic and organic growth opportunities across all key business segments."

The introduction of the group pricing policy impacted sales by
Rs 1.8 crore during the first quarter 2003-04. With sales volume expected to increase in forthcoming quarters, the annual impact of the policy is expected to be around Rs 16 crore.