- 28 Oct 2022
- ICICIdirect Research
TATA CHEMICAL REPORTS STRONG TOPLINE GROWTH IN Q2FY23
TATACHEM - 975 Change: 2.90 (0.30 %)News:
Tata Chemical reported topline growth of 40.2% YoY to Rs 4239 crore against our expectation of Rs 4133 crore. Basic chemical segment grew 45% YoY to Rs 3242 crore while specialty products grew 27% YoY to Rs 999 crore. Gross margins remained flattish YoY while sequentially it declined by 3.1%. EBITDA for the quarter rose by 510 bps to 21.7%. Absolute EBITDA came in at Rs 920 crore against our estimate of Rs 948 crore. Other expenses and power & fuel increased by 30% YoY and 50% YoY, respectively. Tata Chemicals reported adjusted PAT at Rs 576.2 crore against our estimate of Rs 483 crore (up 175% YoY). The delta is largely on account of lower taxes (5% against our estimates of 25%) and other income, which has increased 6% on a YoY basis to Rs 60 crore
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Soda ash prices increased significantly across all units backed by robust demand from the downstream automotive glass manufacturing and detergent sector. Sales volumes of soda ash across all units in H1 declined 6% YoY (1742 MT vs. 1845 MT). The sales price is driving growth in H1FY23. We believe prices and demand will remain stable in the near term while increase in energy prices and feedstock (limestone, coke and raw salt) remains a key concern. Further, we await management commentary on margin stability, going forward
Impact:
Positive