Tata Chemical‘s share price was in the red on Friday as the company reported a massive fall in profit for the September quarter.

What Happened: The company reported a net profit of ₹194 crore for the July-September period, a decline of over 54% compared to the ₹428 crore profit it recorded in the same quarter last year.

Revenue from operations stayed flat at ₹3,999 crore, marginally higher than the ₹3,998 crore reported in the corresponding quarter of the previous year. The company’s EBITDA for the quarter stood at ₹615 crore, with an EBITDA margin of 15.5%.

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What Are Analysts Saying: IIFL Securities said the company’s Q2 net profit of ₹194 crore missed its estimates by 21%. IIFL Securities noted that Tata Chemicals reported weaker-than-expected results, largely affected by unprecedented rainfall in India. The brokerage maintained its “reduce” rating for the stock with a price target of ₹955.

This led to volume losses and higher costs due to unstable operations. However, the report highlighted sequential volume improvements in the US and African businesses, driven by strong demand from China and the Middle East.

Meanwhile, Motilal Oswal reported that Tata Chemicals’ consolidated EBITDA for Q2 FY25 declined 25% year-on-year due to lower realisations, higher freight costs and unfavourable operating leverage across geographies.

The management indicated that soda ash prices have bottomed out, with the last price cut occurring in November 2023 for the domestic market, and they expect prices to improve as the global demand-supply scenario stabilises.

The brokerage highlighted that the company’s profit missed its estimate of around ₹210 crore. The brokerage has a “neutral” rating on the stock with a price target of ₹1,070.

Price Action: Tata Chemical’s share price was down 0.85% to trade at ₹1,064.70 in the early hours of trading on Friday.

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Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.