Tata Chem net zooms to Rs 216 cr on higher sales

Agencies
Mumbai, July 31:
Tata Chemicals reported that its net profit has grown five times to Rs 216 crore in the quarter ended June 30, against Rs 43 crore logged in the same period last year. Sales were up six per cent at Rs 2,477 crore (Rs 2,345 crore) in the quarter under review. Mr R Mukundan, Managing Director, said the reduction of inventory at the Babrala plant and robust demand for soda ash has boosted the bottomline.
Soda ash demand- "However, going ahead the spike in coking coal prices remains a cause of concern. Domestic demand for soda ash is gradually improving and demand environment across the world is robust. We first try to observe the rise in input ourselves, before attempting to pass it on to end customers," he added. The company sells 90 per cent of its soda as production in the US and the UK on fixed price contract, in Kenya it is 30 per cent, while in India 40 per cent of the total output is sold on three and six months fixed price contract.
The company produces 2.5 million tonnes of natural soda ash in US and 0.7 million tonne in Kenya. It has capacity to produce one million tonne of synthetic soda ash in the UK and 0.9 million tonnes in India. Inorganic chemicals contributed Rs 1,299 crore (Rs 1,377 crore) of total revenue, fertilisers Rs 982 crore (Rs 985 crore) and other agri inputs Rs 238 crore (Rs 27 crore). The company has set a target to sell one million units of Swach.
The company plans to commission its first 1.3 lakh tonnes of speciality fertiliser unit at Babrala by December and intends to open 10 such units across the country with an investment of Rs 57 crore each.

Capacity expansion
On plans to double its capacity at Babrala to 2.50 million tonnes with an investment of Rs 3,800 crore, Mr Mukundan said "We are waiting for the Government to a firm commitment on gas supply. We will be able to achieve the financial closure only after the gas allotment." With a shortage of seven million tonnes of urea, the company expects the Government to allocate gas soon, said Mr P.K. Ghose, Chief Financial Officer, Tata Chemicals. The company has a gross debt of Rs 5,046 crore and cash of Rs 1,295 crore as on June quarter, he said. The company's shares were up four per cent at Rs 337.