Tata Chemicals’ Q1 FY2011-12 net sales up 17.1 per cent at Rs2,954 crore; net profit at Rs200 crore
MUMBAI, August 8, 2011

EPS (diluted & non-annualised) at Rs7.9 per share

Q1 FY2011-12 consolidated financial highlights
	Net sales higher by 17.1 per cent at Rs2,954 crore.
	Profit from operations at Rs527 crore compared to Rs518 crore – For the quarter ended June 2011, the Company has not recognised subsidy income of Rs31 crore on opening stock of raw materials for phoshatic and potassic fertilisers, in accordance with the recent office memorandum dated July 11, 2011, issued by the Department of Fertilisers (DoF). The matter is being contested.
	PBT at Rs320 crore vis-à-vis Rs322 crore.
	PAT after Minority Interest at Rs200 crore compared to Rs216 crore — impact of Rs23 crore in accordance with the above circular issued by DoF.
	EPS (diluted and non-annualised) Rs7.90 per share.

Business highlights
	Demand environment across major products firm.
	Rising input costs, however, continuing to exert pressure — increasing realisations combined with efficient operations moderate the impact.
	Acquired a strategic stake in the USA’s potash explorer EPM Mining Ventures to access low-cost sulphate of potash.
	Successful commencement of Rallis India’s new facility at Dahej in June 2011.
	Deal with Canpotex (North American potash marketing consortium) to sell potash at a price of $470 per tonne — end of the deadlock over the import price of the crop nutrient and potash "import holiday".

Commenting on the company’s Q1 FY2011-12 performance, R Mukundan, managing director, said:

“Our healthy operating performance is reflective of the traction we are witnessing in our international businesses driven by strong demand across segments. The rising input prices in the US and Kenya have been partially offset by higher realisations and operating efficiencies. On the domestic front, however, increasing interest rates in addition to higher input costs have pressured demand from end-user segments.

TCL’s strategy is to evolve as a low-cost resource player. This we believe will not only safeguard us from the vagaries of the external environment but also enable us to expand margins, improve market presence and significantly enhance the sustainability of our business model. The acquisition of IMACID, Tata Chemicals Magadi and Tata Chemicals North America were initial steps in that direction. Our investments in British Salt and Gabon are further moves in line with this strategy. Continuing this approach, during the just concluded quarter we acquired a strategic stake in EPM giving us a source of sulphate of potash. With this transaction we will complete our manufacturing presence across all three groups of fertilisers.

Concurrently our thrust is on leveraging our deep and expansive distribution reach achieved through our edible salt and TKS networks, to drive growth in our consumer products and agri businesses in both the urban and rural areas.

We are happy with our performance and are confident of the growth opportunities and inherent value of our business model.”

Business Performance
Chemicals
	Domestic demand for soda ash healthy – however, rise in interest rates likely to impact sales to end-user segments.
		Stable performance from Mithapur operations.
		Rising input (imported coal and limestone) costs continue to exert pressure.
	Ongoing impact of extreme winter during early January 2011 lower soda ash production at Tata Chemicals Europe.
		Repairs for breakdowns completed – production returning to normal levels.
	Robust production, sales and realisations at British Salt – ahead of forecast.
	Improved performance at Tata Chemicals Magadi driven by higher production and better realisations for both, SAM and PAM.
		New contracts expected to be priced higher by $10-15 (NSR)
	Improved earnings performance at Tata Chemicals North America plant due to higher production volumes and renegotiated contracts.
		Adverse impact of input costs (coal) likely to be offset by further proposed increases in realisations.

Consumer products
	Tata Chemicals remains the market leader with 63.2 per cent market share in the national branded segment.
	Strong demand for branded salt across the nation — branded salt volumes growth at approximately 4 per cent.
	Offtake for i-Shakti range of pulses robust.

Fertilisers
	Production at Babrala has stabilised post shutdown and the shortfall is gradually being covered on the back of enhanced efficiencies.
	Witnessed gradual improvement in customised fertiliser volumes.
	Healthy growth in sales volumes at IMACID, Morocco — margin improvement dependent on increase in realisations.
	For the quarter ended June 2011, the company has not recognised subsidy income of Rs31 crore on opening stock of raw materials for phoshatic and potassic fertilisers, in accordance with the recent office memorandum dated July 11, 2011, issued by the Department of Fertilisers. The matter is being contested.