Investors unimpressed by Tata Chemicals strong Q2 show, dump shares

The Tata group company reported income from operations on a consolidated basis at Rs 4,239 crore, up by 40 percent from the year-ago quarter. The operating income is lower than expected, say analysts

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The share price of Tata Chemicals slumped more than four percent in the afternoon trade despite the company reporting impressive growth in profit after tax and revenue. Analysts said the company’s operating income was lower than expectations.

The Tata group company on October 27 reported income from operations on consolidated basis at Rs 4,239 crore, up 40 percent from Rs 3,022 crore in the year-ago quarter.

Consolidated profit from continuing operations was at Rs 685 crore as compared to Rs 248 crore in the corresponding quarter of the previous year.

“The operating performance reflects improved realisations and efficient cost management in the context of elevated energy and input costs,” the company said in a statement.

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The investors were not impressed nor were the analysts. At 1.18 pm, the share was trading 4.5 percent lower on the National Stock Exchange at Rs 1,134.10.

“Operating performance lower than expectations,” said Motilal Oswal. The broker also highlighted that company’s EBIT margins were up 740 basis points YoY to 20 percent but sequentially, it fell by 510 basis points.

Hundred 100 basis points are amount to one percentage point.

Commenting on the results, R Mukundan, Managing Director & CEO, Tata Chemicals, said, “We continue to work closely with our customers and partners to navigate the challenging global environment.”

“The demand continues to be positive across our products and their applications, which has resulted in improved realisations compared to the previous year. We continue our focus on deleveraging and executing expansion projects.”

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