Tata Chemicals has reported 32 per cent increase in March quarter net profit at Rs 343 crore against Rs 260 crore logged in the same period last year, largely due to the company curtailing its exposure to subsidised fertilizer business and tight control on working capital.
Revenue from operations were down 15 per cent at Rs 3002 crore (Rs 3,565 crore) due to lower revenue from fertilizer business. Total expenses were down 17 per cent at Rs 2,734 crore (Rs 3,311 crore).
The Board of directors have recommended a dividend of Rs 11 per share for the financial year 2016-17.
The company has signed an agreement with Yara Fertilisers to sell its urea and customised fertilizer businesses at Babrala in Uttar Pradesh for Rs 2,670 crore and has treated the business as ‘operations discontinued’ on its balance sheet with an expectations of getting requisite approvals in 60-90 days. It is currently having exposure to fertilizer business only through its operations at Haldia in West Bengal.
R Mukundan, Managing Director, Tata Chemicals said the company has cut down on traded fertilizer where much of the inputs are imported for value added products and sold in West Bengal, Jharkhand and Bihar through the popular brand Paras.
The reduction in traded fertilizer has resulted in interest cost saving even as the company is focused on maximising cash generation from the Haldia plant, he added. The company plans to launch its branded spices across the country with its launch in South India.
The company’s receivable from Government for selling fertilizer at subsidised price was down at Rs 1,684 crore (Rs 1,902 crore) as of March 31, 2017.
Its Gross debt was lower at Rs 7,443 crore (Rs 9,090 crore) and the net debt was down 24 per cent at Rs 5,573 crore (Rs 7,380 crore).
“We expect our overseas operations in UK and Kenya to turn profitable from this fiscal with completion of business restructuring,” said Mukundan.
In fact, he said the UK business has registered a profit of Rs 100 crore in FY’17 as against a loss of Rs 60 crore logged in the preceding fiscal.
Shares of the company were down 0.46 per cent at Rs 612 on Friday.