Tata Chemicals Ltd (TCL)’s revenue growth of 29% was ahead of expectations. However, the operating profit margin (OPM) declined by 280bps to 15.6% due to severe input costs pressure, especially in the fertilizer segment.
Adjusted for one-off items such as unrealised loss of Rs24.7 crore on revaluation of unhedged external commercial borrowing (ECB) and impairment of assets by Rs25.9 crore in the fertiliser segment, the adjusted earnings after minority Interest declined marginally to Rs189.6 crore during the quarter.
Outlook: The margins in the fertilizer division and inorganic chemicals are expected to remain under pressure due to firm increase in input cost on the back of depreciation in the rupee against the dollar. The urea operational capacity has increased by 100,000 tonne per annum through debottlenecking at Babrala.
However, in FY2013");'> Q1 FY2013 the production of urea may be lower due to a shut down of the Babrala plant in the month of April 2012 for a month in order to debottleneck its urea capacity. The capacity utilisation at the Haldia plant was also on the lower side due to lower availability of phosphoric acid from IMACID which was shut down for 45 days for its maintenance.
Valuation: We have marginally revised downward our earnings estimates for FY2013 and introduce.
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Adjusted for one-off items such as unrealised loss of Rs24.7 crore on revaluation of unhedged external commercial borrowing (ECB) and impairment of assets by Rs25.9 crore in the fertiliser segment, the adjusted earnings after minority Interest declined marginally to Rs189.6 crore during the quarter.
Outlook: The margins in the fertilizer division and inorganic chemicals are expected to remain under pressure due to firm increase in input cost on the back of depreciation in the rupee against the dollar. The urea operational capacity has increased by 100,000 tonne per annum through debottlenecking at Babrala.
However, in FY2013");'> Q1 FY2013 the production of urea may be lower due to a shut down of the Babrala plant in the month of April 2012 for a month in order to debottleneck its urea capacity. The capacity utilisation at the Haldia plant was also on the lower side due to lower availability of phosphoric acid from IMACID which was shut down for 45 days for its maintenance.
Valuation: We have marginally revised downward our earnings estimates for FY2013 and introduce.
....more info