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Tata Chemicals reported that its consolidated net profit more than doubled to Rs 275 crore (Rs 127 crore) despite cost pressure. The company managed to pass on the incremental cost to end-consumers on the back of healthy demand for all its products including soda ash, fertiliser and chemicals.
Net sales were up 21 per cent at Rs 3,540 crore (Rs 2,927 crore). Raw material consumption cost moved up 26 per cent to Rs 1,052 crore (Rs 832 crore).
The company's consolidated performance are not comparable as in January it acquired 100 per cent stake in British Salt, UK, which contributed a net profit of Rs 27 crore in the September quarter.
Passing on costs
Mr R. Mukundan, Managing Director, said the company had managed to absorb a portion of increase in input cost through operational efficiency, but had to pass on the cost to end-consumers after incessant rise in the raw material price.
“The demand for soda ash was sustainable despite the economic crisis in the Euro Zone, but if the trouble continues the construction and automobile sector will be badly hit thus depressing the demand,” he added.
The company sees demand for soda ash tapering in India if the lending rates move up any further, while global demand is expected to remain stable, with the UK being an exception.
Highlighting the healthy volume growth in customised fertiliser, Mr Mukundan said projects worth Rs 30,000 crore initiated by various companies are struck due to lack of Government assurance on gas supply.
Fund raising
Tata Chemicals plans to raise funds through bonds has been hampered by the uncertainty in the market due to euro zone crisis, he said without elaborating on the quantum of fund to be raised or the time frame.
The company plans to increase revenue from iShakti pulses by penetrating into new markets and increasing the tonnage. It has enhanced the reach of iShakti to 10 States with its launch in Karnataka and Gujarat during the quarter.
“We target to sell 15,000 tonnes of pulses realising revenue of Rs 150 crore. It will generate revenue of Rs 350 crore by selling 35,000-40,000 tonnes next fiscal and taking a big leap from there to 100,000 tonnes and business of Rs 1,000 crore,” said Mr Mukundan.
The company's shares on BSE were up 0.44 per cent at Rs 332 on Friday.
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