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 India's Tata Chemicals reported a near 55% year-on-year fall in its second-quarter profit on Thursday, hurt by lower soda ash prices and higher freight costs.

The chemical maker's consolidated net profit fell to 1.94 billion rupees ($23.1 million) for the quarter ended Sept. 30 from 4.28 billion rupees a year earlier.

While revenue from operations rose 0.03% to 39.99 billion rupees for the quarter, total expenses rose nearly 7% to 38.03 billion rupees, with freight and forwarding charges rising nearly 32%.

For further results highlights,

KEY CONTEXT

An economic downturn in China and stagnant demand in the EU have hit prices of soda ash, which is the primary business segment for Tata Chemicals.

Globally, soda ash prices fell nearly 23% during the quarter, according to analysts at brokerage Nirmal Bang.

Tata Chemicals had cut soda ash prices last November.

Analysts had flagged that chemical companies could face higher expenses due to an increase in container and freight costs amid the Middle East crisis.

PEER COMPARISON

Valuation (next Estimates (next 12 Analysts' sentiment

12 months) months)

RIC PE EV/EBIT Revenue Profit Mean No. of Stock to Div

DA growth growth rating* analysts price yield

target** (%)

Tata 28.85 12.41 4.69 3.51 Sell 7 1.27 1.36

Chemicals

Deepak 35.40 22.99 14.05 28.30 Hold 16 0.99 0.26

Nitrite

SRF 36.54 20.44 15.14 27.81 Hold 26 1.00 0.31

GHCL 8.55 4.85 7.03 NULL Buy 1 NULL 1.91

* Mean of analysts' ratings standardised to a scale of Strong Buy, Buy, Hold, Sell, and Strong Sell

** Ratio of the stock's last close to analysts' mean price target; a ratio above 1 means the stock is trading above the PT

JULY-SEPTEMBER STOCK PERFORMANCE

($1 = 84.0270 Indian rupees)