May 26, 2017

Tata Chemicals announces consolidated income from operations for FY16-17; PAT is highest ever with 29 percent year-on-year rise

Tata Chemicals (the company) today declared its consolidated financial results for the fourth quarter ended March 31, 2017. The company reported consolidated income of Rs3,002 crore and a consolidated PAT of Rs311crore from operations for the quarter ended March 31, 2017, a year-on-year increase of 54 percent. The company reported its highest ever PAT of Rs993 crore (FY17), up 29 percent from FY16.

Standalone Q4 FY16-17

  • Sustained operational performance in the Soda Ash and Salt business
  • Indian chemicals business saw better realisation and higher sales volumes
  • The consumer products business saw higher sales realisation, which was partly offset by lower sales volumes in pulses. Tata Salt’s market share improved due to successful purity campaigns conducted to drive differentiation.
  • Lower fixed costs and inputs displayed improved margins in the Phosphates business.
  • Subsidy outstanding at Rs1,684 crore
  • Overall improved working capital management

Consolidated Q4 FY16-17

  • North American operations maintained steady performance despite low production, which was impacted by maintenance outage and extreme cold weather in Wyoming, the lowest since 1962
  • UK operations continue their improved performance. Production volumes above budget for soda ash, bicarbonates and salt. Strong sales volumes for salt and sodium bicarbonate
  • Magadi made good progress due to focus on improving quality and efficiencies
  • Rallis India and Metahelix saw higher sales volumes leading to better operating margins

Business-wise performance

Living essentials

  • Tata Salt remains the market leader in the national branded segment
  • Successful campaigns conducted to connect with the consumer, with focus on purity of Tata Salt
  • Market response to the newly launched products under the Tata Sampann brand, namely spices and low oil absorb gram flour (besan in Hindi), has been good
  • Tata Salt’s Namak ke Wasstey campaign won silver at ABBY Awards – Goa Fest 2017 and gold under ‘Best Media Strategy’ consumer products – MADDY’s 2017

Industry essentials

  • Indian Chemicals business continues to register steady performance
  • North American operations continues to focus on Plant reliability and improving operating margins and output
  • European operations continues to register good performance on the back of cost control measures
  • Magadi improves product performance, yielding better results

Farm essentials

  • Normal monsoons led to good prospects for agriculture and healthy demand
  • Focus on maintaining efficient operations and market-driven product strategy at Haldia
  • Sustained production in urea business at planned energy levels

Dividend Tata Chemicals’ board of directors have recommended an equity dividend of Rs11 per share for FY2016-17, subject to shareholder’s approval at the AGM.

Executive Comment
R Mukundan, managing director and CEO, Tata Chemicals, said, “The quarter under review has been encouraging, with improved performance led by the Indian operations. Our sustained focus on improving operational performance and cost efficiencies has ensured margin expansion.

The year registered good performance across businesses and geographies, in spite of challenges faced on several fronts. The Wyoming operations had production shortfall in Q4 as compared to last year, while for the full year the production was up.

In the farm business, Rallis India and Metahelix continues with higher sales and margins.

The consumer products business continues to grow and Tata Salt maintains its market leader position. Tata Sampann spices and low oil absorb besan were rolled out during the year.

Going forward, we will continue our focus on delivering operational excellence across our business and driving growth in consumer products and specialty chemicals (agrochemicals, nutraceuticals and advance material) while maintaining leadership in soda ash.