A drop in price realisations in international operations saw Tata Chemicals Ltd. (TCL), report a 30 per cent drop in consolidated net profit for the first quarter of 2013-14 at Rs.75 crore.
The company’s consolidated net sales rose 9 per cent to Rs.3,292 crore.
TCL’s global chemicals business was hit by softening demand, lower realisations and plant stoppages.
“Demand is not an issue because we sold more but the pricing environment and fixed costs have been bigger issues,” said P. K. Ghose, CFO, while addressing media here.
He said that the delayed subsidy by the government resulted in TCL bearing an additional Rs.16 crore in the first quarter of 2013-14. Around Rs.1,160 crore was due from the government in terms of subsidies, he said. The company’s debt stands at around Rs.6,495 crore.
“The softening of international urea prices should have brought prices down here too. But we are very concerned over the rupee depreciation. The rupee-dollar movement is one of the biggest risks for us,” R. Mukundan, Managing Director, said, adding that the impact of rupee depreciation on the company was around Rs.400 crore.
The company has a 65.2 per cent share in the Indian branded salt market.
While the soda ash industry was impacted by the slowdown in the real estate and automobile sectors, the farm sector is doing well. “ All those areas of the sector where there is no subsidy interests us, like seeds, crop protection and specialty nutrients,’’ Mr. Mukundan said.
He said the company’s Chennai plant, to make nutraceuticals, would commence production in December. “We will initially make fructo-oligosaccharides and several other products will follow suit.”
On the Bombay Stock Exchange, Tata Chemicals stock closed at Rs.251.60 on Tuesday, down Rs.7.20 (2.78 per cent).