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Tata Chemicals’ Q2FY1617 consolidated income from operations at Rs3,496 crore; PAT at Rs213 crore

Tata Chemicals (the "Company") today declared its consolidated financial results for the second quarter ended September 30, 2016. The Company reported income from operations for the quarter ended September 30, 2016 on consolidated basis at Rs3,496 crore and Rs1,615 crore on a standalone basis. EBITDA from continuing operations was reported at Rs554 crore on a consolidated basis and at Rs181 crore on a standalone basis.

Standalone Q2 FY16-17

  • Sustained operational excellence and strong cost control in the soda ash and salt business contributed to a good operating performance
  • Encouraging response for the newly launched spices and besan under the Tata Sampann brand
  • Recent government intervention on capping prices for pulses led to a depressed market sentiment and affected margins in the pulses business including contract losses
  • Lower sales volumes in the phosphatic business due to suspension of production at Haldia because of high raw material costs
  • Agri trading volumes reduced to focus on improving working capital position and non- subsidised sales
  • Subsidy receivable at Rs1,377 crore as on September 30 against Rs1,479 crore on June 30, 2016 and Rs1,902 crore at March 31, 2016
  • Standalone net debt on September 30 was Rs1,972 crore against Rs2,710 crore on March 31, 2016.

Consolidated Q2 FY16-17

  • European operations show profitability in all businesses
  • North American operations benefited from improved plant production and energy costs
  • Magadi continues to focus on improving operational performance
  • Rallis witnesses improved performance on the back on a normal monsoon, revenues up by 20 percent
  • Consolidated net debt on September 30 was Rs6,584 crore against Rs7,686 crore on March 31, 2016.

Business-wise performance

Living Essentials

  • Spices now being rolled out in western India, after northern and eastern markets
  • Tata Salt remains the market leader in national branded segment

Industry Essentials

  • Global demand of soda ash in key markets stable; however, prices remain range bond with soft bias
  • Indian chemicals business continues to register good performance
  • North American operations show improved operating margins and output
  • European operations register good performance on expansion of margins

Farm Essentials

  • Lower sales volumes due to suspension of production in phosphatic fertiliser unit due to high raw material cost
  • Rural demand on the back of a normal monsoon ensure strong performance of the non-subsidy based products
  • Sustained production level at Babrala

Executive Comment

R Mukundan, managing director, Tata Chemicals, said, "The quarter continued to witness a steady performance from the chemicals business in India. In other geographies, the European operations continue to show improved profitability. Our focus remains on increasing operational performance across geographies, while remaining watchful of the volatility in the market.

The consumer product business continues its leadership in the branded salt market. We are happy to see a very encouraging response from consumers for our besan and range of spices under the Tata Sampann brand, and continue to step up the launch in the western region. However, recent government intervention with regard to capping prices for pulses affected margins for the business.

The fertilizer business continues to be under pressure with subsidy outstanding at Rs1377 crore However, the normal monsoon has ensured a good performance of the non-subsidy based products and the crop-protection business under Rallis.

All requisite formalities on the sale of the urea business to Yara International are progressing as per expectations.

Going forward, we will continue to focus on the consumer facing business and non-subsidy based farm business, with consumer products and specialty chemicals being our key areas of growth.




TCL TUBE

Zarir N Langrana, COO, chemicals business, Tata Chemicals