Tata Chemicals‘ share price continued to slump for the fourth straight session on Tuesday as the company’s December quarter results disappointed investors.
What Happened: The Tata Group company’s net profit plummeted by around 55% to ₹158 crore compared to the same period last year. This decline was primarily attributed to sluggish market demand across key regions and segments. The company’s revenue also took a hit, dropping more than 10% to ₹3,730 crore on a year-on-year basis.
See Also: Tata Stock Has Surged 100% In 1 Year, But Analyst Sees A 36% Slide Ahead
EBITDA for the period dropped 41.2% year-on-year to ₹542 crore, with margins shrinking to 14.5%. Tata Chemicals attributed this decline to pricing pressure across all regions and lower volumes. In the US, volumes were significantly lower by 80,000 metric tons due to plant shutdowns and rail car shortages. This led to lower absorption of fixed costs and an increase in fixed costs during the quarter.
However, the chemicals major emphasized that its debt repayment remained on track, with the prepayment of $25 million in the US during Q3FY24.
Reacting to the results, Kotak Securities assigned a “sell” call on the stock with a price target of ₹780. The target implies an around 20% downside from the stock’s last closing price of ₹979.25.
Price Action: Tata Chemicals’ share price was down 2.92% to trade at ₹950.70 as the markets opened on Tuesday.
Read Next: Hyundai Motor Said To Be Exploring India IPO To Ward Off Tesla Threat
Don't miss a beat on the share market. Get real-time updates on top stock movers and trading ideas on Benzinga India Telegram channel.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.