Tata Chemicals‘ share price was in the green on Tuesday after the company posted its earnings for the June quarter on Monday evening.
What Happened: The numbers were mostly in line with Bloomberg estimates. The company reported a decline in net profit for the quarter, which fell around 67% to ₹190 crore, down from ₹587 crore in the same quarter last year.
Revenue from operations also decreased by around 10% to ₹3,789 crore, compared with ₹4,218 crore in the corresponding quarter of the previous year.
Brokerage Reactions: Motilal Oswal maintained its “neutral” rating on the stock with a target price of ₹980. The brokerage firm said that the Tata Group company posted weak June quarter results missing its estimates of revenue, EBITDA and net profit.
The analysts highlighted that the current short-term challenges in the soda ash market, particularly due to weak demand in Western Europe and increased competition from Turkish suppliers, are impacting global prices negatively. However, it expects the firm’s outlook to improve in the medium term with the growth of new applications like solar glass and lithium-ion batteries.
Kotak Institutional Equities also maintained its “sell” rating for the stock but raised the fair value target price to ₹830 from ₹780. The brokerage firm said that the company’s consolidated EBITDA for the quarter fell by 45% year-on-year, missing its estimate by a modest 2%. While the overall EBITDA was lower, there were positive surprises from the India and U.S. segments, the analysts noted.
EBITDA in India and the US rose by 22% and 35% quarter-on-quarter, respectively. This improvement was attributed to reduced expenses and higher realisations. The U.S. business particularly benefited from a temporary increase in export prices due to tight supplies from China.
Price Action: Tata Chemicals’ share price was up 0.84% to trade at ₹1,062.10 in early trade on Tuesday.
Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.
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