India`s Tata Chemicals posts 32% drop in Q2 profit on weak demand, prices
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India's Tata Chemicals posted a 32% slide in second-quarter profit on Friday, hurt by lower soda ash prices and soft demand.
The Tata Group-owned company's consolidated net profit fell to 4.28 billion rupees ($51.4 million) in the quarter ended Sept. 30, from 6.28 billion rupees a year earlier.
Revenue from operations dropped 5.7% to 39.98 billion rupees, weighed down a 3.7% drop in its basic chemistry products segment, its biggest, and which includes soda ash, sodium bicarbonate, calcium chloride.
"Demand environment for soda ash in domestic markets in India and U.S. was stable. In other markets, softness was observed, especially in container glass and flat glass sectors, leading to pricing pressure," Managing Director and CEO R. Mukundan said in a statement.
Tata Chemicals supplies to the glass, detergent, industrial and chemical sectors.
In August, the company lowered domestic soda ash prices to 30,500 rupees per metric ton for light soda ash, from 32,300 rupees, and to 31,000 rupees per metric ton for dense soda ash, from 32,800 rupees.
In the previous quarter, the Mumbai-based company had said that a sharp fall in caustic soda prices had led to the silicate market switching to caustic soda from soda ash.
Last month, its bigger peer UPL Ltd posted an unexpected quarterly loss due to weak demand, channel destocking and competition from China.
Tata Chemicals' shares settled 0.51% higher ahead of its results. They have gained nearly 3% so far this year, while UPL's shares have slid nearly 24%. ($1 = 83.2940 Indian rupees)
(Reporting by Yagnoseni Das in Bengaluru; Editing by Savio D'Souza)
