You are here: Home » Markets » News
Business Standard

Tata Chemicals slips 8% on weak operational performance in March quarter

The management said during the quarter, the company's profits was muted due to one off in US operations caused by Polar Vortex leading to sharp rise in gas prices.

Tata Chemicals | Buzzing stocks | Markets

SI Reporter  |  Mumbai 

drdo, research, biological warfare, chemical, military, coronavirus,

Shares of slipped 8 per cent to Rs 721.85 on the BSE in intra-day trade on Tuesday after the company posted a disappointing operational performance.

For the January-March quarter of the financial year 2020-21 (Q4FY21), the company’s earnings before interest, taxes, depreciation, and amortization (Ebitda) margins declined 610 basis points (bps) to 10.7 per cent mainly due to lower gross margins, higher other expenditure and Rs 45 crore one-off expense in US operations caused by Polar Vortex leading to a sharp rise in gas prices.

Overall margins of India operations were marginally impacted due to lower sales realisation despite improved sale volumes across the product portfolio. US operation margins were impacted due to higher fuel price on account of the Polar Vortex, which hit the USA during last the month of the quarter. Overall, UK operation remained steady, but margins were impacted due to lower sales realisation, higher freight costs and higher plant spending due to flooding in January, said.

In Q4FY21, the company’s revenues grew 11 per cent year-on-year (YoY) to Rs 2,636 crore mainly due to 38 per cent YoY growth to Rs 520 crore in speciality product. The basic chemical segment revenues grew 6 per cent YoY to Rs 2,111 crore. The profit after tax (PAT) declined 94 per cent YoY to Rs 11.8 crore amid lower operational performance and one-off in UK operations due to Rs 16.5 core of tax asset write off and Rs 7.5 crore of refinancing cost and impact of floods.

The management said during the quarter, the company’s profit was muted due to a one-off in US operations caused by Polar Vortex leading to a sharp rise in gas prices. There was a one-off in UK operations due to tax asset write off and re-financing cost. We are witnessing the strengthening of Spot soda ash prices which will ease margin pressures sequentially in the coming quarters. Going forward, time-bound commissioning of capacities in Mithapur and Dahej coupled with the growth of Specialty products are critical steps towards the transformation of the company, the management said.

At 11:06 am, the stock was trading 6 per cent lower at Rs 733 on the BSE, as compared to a 0.27 per cent rise in the S&P BSE Sensex. The trading volumes on the counter nearly doubled with a combined 10.5 million equity shares having changed hands on the NSE and BSE.

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Tue, May 04 2021. 11:09 IST