July 25 (Reuters) - India's Tata Chemicals reported a rise in first-quarter profit on Friday, as lower expenses limited the impact of lower soda ash prices and subdued volumes.
The chemical maker's consolidated net profit rose 87% to 2.52 billion rupees ($29.1 million) in the quarter ended June 30.
Its revenue from operations dropped 1.9% to 37.19 billion rupees. However, expenses declined at a faster rate of 3.4% to 36.21 billion rupees, on inventory gain and a drop in power and fuel expenses.
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KEY CONTEXT
Global soda ash prices, which account for two-thirds of Tata Chemicals' sales volume, remained under pressure due to an oversupply from China. Prices of the chemical slumped about 34% during the April-June quarter, according to analysts at PL Capital.
Demand for flat and container glass, which uses soda ash in production, is steadily increasing in India, with Mordor Intelligence projecting a compounded annual growth rate of 5.42% through 2030.
However, heavy dumping of the chemical by Chinese exporters has sharply decreased prices. Analysts said anti-dumping investigations may result in safeguard duties, supporting domestic producers.
PEER COMPARISON
|
Valuation (next 12 months) |
Estimates (next 12 months) |
Analysts' sentiment |
|||||||
|
RIC |
PE |
EV/EBITDA |
Revenue growth (%) |
Profit growth (%) |
Mean rating* |
No. of analysts |
Stock to price target** |
Div yield (%) |
|
|
Tata Chemicals |
(TTCH.NS) |
40.72 |
13.05 |
5.83 |
70.18 |
Sell |
7 |
1.26 |
1.13 |
|
Deepak Nitrite |
29.69 |
18.61 |
9.67 |
19.38 |
Hold |
17 |
0.90 |
0.39 |
|
|
SRF |
(SRFL.NS) |
46.34 |
25.25 |
14.17 |
41.67 |
Hold |
25 |
1.12 |
0.24 |
|
GHCL |
9.28 |
5.12 |
3.08 |
5.78 |
Buy |
2 |
0.69 |
1.94 |
* Mean of analysts' ratings standardised to a scale of Strong Buy, Buy, Hold, Sell, and Strong Sell
** Ratio of the stock's last close to analysts' mean price target; a ratio above 1 means the stock is trading above the PT
APRIL-JUNE STOCK PERFORMANCE
-- All data from LSEG
-- $1 = 86.4850 rupees
Reporting by Manvi Pant; Editing by Sherry Jacob-Phillips and Vijay Kishore
Source: Reuters