Open ICICI
3-in-1 Account
Manage your Savings, Demat and Trading Account conveniently at one place
- 18 Oct 2024
- ICICI Securities
-
Share
-
-
-
-
-
TATA CHEMICALS Q2FY25- RALLIS, NORTH AMERICA DRIVE NUMBERS; INDIA MUTED
News: Revenues grew 6% QoQ to ₹ 3999 crore tracking ~19% growth in Rallis (22% of the revenues). Ex-Rallis revenues (mainly Soda Ash) stood at ₹ 3071 crore, up 2% on QoQ basis. While North America Soda Ash sales (34% of the revenues) grew ~9% QoQ to ₹ 1391 crore, India Soda Ash sales (~24% of the revenues) de-grew ~7% to ₹ 950 crore. EBITDA grew 8% QoQ to ₹ 618 crore and margins improved ~40 bps to 15.5% driven by 560 bps improvement in Rallis margins to 17.9% and 100 bps improvement in North America margins to 16%. India margins on the other hand dropped sharply by 800 bps to 14% due to 10 days of operational loss due to heavy rains and costs related to unstable operations.
Views: North America performance was stable despite softness in container glass. The QoQ growth was driven by ~8% volumes growth and ~1% growth in realization (second consecutive quarter of realization growth). India, on the other hand impacted by disturbance on account of heavy rains but despite that ~5% volumes de-growth and ~3% realization indicates apparent weakness. Rallis numbers were buoyed by Seeds business and stable agrochem performance. However, given the current global demand-supply scenario the management has maintained that prices have more or less bottomed out across geographies. It is guiding for an expansion capex of ₹ 2300 crore to be spread between FY25-28 which mainly includes capacity expansion in Soda Ash.
Impact: Neutral