Tata Chemicals shares slip 4% after Q1 net profit declines 67% YoY

For the quarter under review, net income declined by 9.88 per cent to Rs 2,406.82 crore from Rs 2,670.90 crore

Shares of Tata Chemicals fell as much as 4 per cent to Rs 293.05 apiece on the BSE on Monday after the company posted a 67.23 per cent drop in its consolidated net profit at Rs 74.15 crore for the June quarter due to poor sales. It had posted a net profit of Rs 226.33 crore in the year-ago quarter.

At 11:18 am, the stock was quoting over 2.5 per cent lower at Rs 297.75 on the BSE. In comparison, the S&P BSE Sensex was traing 412 points, or over 1 per cent lower at 37,195 levels. 

For the April-June 2020 quarter, net income declined by 9.88 per cent to Rs 2,406.82 crore from Rs 2,670.90 crore in the corresponding quarter of the preceding fiscal.

The company's total expenses decreased by 1.28 per cent to Rs 2,296.17 crore from Rs 2,325.91 crore in the year-ago period, the filing said. CLICK HERE TO READ THE REPORT

Analysts at Motilal Oswal Financial Services  (MOFSL) expect Tata Chemicals (TTCC) to deliver revenue / earnings before interest, taxes, depreciation, and amortisation (EBITDA) at compound annual growth rate (CAGR) of 7 per cent /8 per cent over FY20-22E.

"TTCH – Soda Ash and Sodium Bicarbonate – is expected to remain steady (over the medium-to-long term). Cash generated from these businesses would be partially deployed toward the Specialty Chemicals segment," the brokerage said in a report issued on July 25. 

The company is trading at an implied EV/EBITDA of 5.8x/4.9x FY21/FY22E, it notes and maintains a "BUY" rating on the stock with the target price of Rs 404.