Tata Chemicals has reported a net profit of ₹238 crore in the December quarter, against a net loss of ₹16 crore in the same period last year, largely due to higher realisation from the soda ash business. Net sales were up four per cent at ₹4,719 crore (₹4,551 crore).
The company completed the restructuring of its operations in Kenya and registered a profit of ₹10 crore in the quarter under review, against a loss of ₹30 crore.
However, it expects that the planned shut-down of 15 days in the March quarter will impact production and profitability. As part of the rejig, it has reworked its product mix and stopped soda ash production. High energy costs have hit Tata Chemicals’ UK operations, though it expects the business to improve once it installs a turbine by September next year. R Mukundan, Managing Director, Tata Chemicals, said soda ash prices had been rising steadily and may remain high as about 1.4 million tonnes of global capacity was shut down over the last year. Tata Chemicals has itself shut down soda ash production of about one million tonnes in the UK and Kenya. The fertiliser business remains stressed due to the lack of clarity on Government subsidy for urea beyond the cut-off level.
Just as in the case of petroleum products, the Government should decontrol urea prices as prices have fallen substantially to $290 a tonne from $350 a tonne in the last few months, said Mukundan.
Unfortunately, he said, each Ministry involved in this issue has contradicting views and there is no clarity.
The company expects its branded pulses and spices venture to grow faster and be more profitable than the salt business.
Its subsidy receivable from the Government on its fertiliser business is ₹1,664 crore as of the December quarter. The company has consolidated debt of ₹6,500 crore, while it owes ₹1,600 crore on a standalone basis. It has planned a capex of ₹500 crore for the next fiscal. Shares of the company were down 3 per cent at ₹449 on Friday.