Tata Chem going strong

Tata Chemicals is among the top five gainers on the BSE since the opening bell today; opening 4.5% higher at Rs.999.95, the stock price zoomed up to an intraday high at Rs.1086.30, rising 13.5%.

The market has given its Q1FY23 performance a big thumbs up. Its consolidated net profit for the quarter rose by a good 86% (YoY) to Rs.637 crore on a 34% rise in revenue from operations at Rs.3995 crore.

EBITDA margins rose 520 bps to 25.4%, which the company says is the highest in its history. This was thanks to a much lower cost incurred in power& fuel and freight costs. Despite a muted volume growth, performance was led mainly by improved soda ash realisations across all geographies. With some companies in China closing down and with no new soda ash plant capacity being added, the scene for soda ash is expected to remain bullish.

The company said that this positive momentum is expected to continue in the near to medium term, though the input side environment especially energy remain at elevated levels coupled with logistic challenges that continue to be seen in the market.