Tata Chemical reports robust revenue growthTATACHEM - 1012 Change: 28.70 (2.92 %)
News: Tata Chemical reported topline growth of 34.2% YoY to Rs 3995 crore against our expectations of Rs 3697.5 crore. Basic chemical segment grew 41% YoY to Rs 3060 crore while speciality products grew by 17% YoY to Rs 934 crore. The growth in basic chemical was largely led by strong realisations of soda ash across all geographies. EBITDA margins for the quarter rose 520 bps to 25.4% (highest in the history) owing to lower power & fuel and freight cost. Absolute EBITDA increased by 69% YoY to Rs1015 crore against our estimates of Rs 738.4 crore. Adjusted PAT increased by 106% YoY to Rs 593 crore against our estimates of Rs 383.8 crore.
View: The performance for the quarter was largely led by improved soda ash realisations across all geographies, which led strong top line growth for the quarter. However the volume growth remained muted for the quarter. Going ahead, since there is some capacity closure at China along with no major capacity addition of soda ash across the globe, we expect soda ash market can remain buoyant. On the other side, any slowdown in the construction demand owing to recessionary fear can put pressure on the demand environment of soda ash and thereby its prices in short term. This can impede growth of TCL owing to high base in the coming quarters.