Tata Chemicals, an Indian global company dealing with chemicals, crop protection and specialty chemical products, recently revealed its financials for the quarter ending June 2020. As per the results, the company’s standalone net profit slid by 47% to Rs. 109 crore in Q1 June 2020 compared with Rs 206 crore in Q1 June 2019. Revenue from the chemical products segment fell to INR 612.09 crore as against INR 703.39 crore in the last quarter.
However, the company’s shares rose for the third consecutive day by about 10% on Thursday i.e. on August 20, 2020. The company’s stock rose nearly 62% from its 52-week low figure of Rs 197.40 recorded on 23 March 2020. The abrupt rise in the stock value has been attributed to its improving performance from its Soda Ash division. Despite unprecedented slowdown in several downstream sectors, the company continued the production and supply of the essential commodities, eagerly adopting the new normal with the aim to keeping itself well positioned in the market and preserve its gross margins. During Q1FY21, the company continued to produce salt without disruption while the production of Soda Ash and Sodium Bicarbonate showed improvement post the initial phases of lockdown due to restart in downstream operations. Tata Chemicals is one of the largest producers of Soda Ash, holding capacity of 4.3 million tonnes per annum. The product is widely used for manufacturing detergents, glass, cleaning products and in several metallurgical applications (such as recycling of aluminium and zinc) etc.
Soda Ash prices in the domestic market are hovering in the range of INR 24-24.5 per kg and are expected to head towards a brief period of recovery in the month of September.
Other manufacturers of Soda Ash in the domestic market include Gujarat Heavy Chemicals Ltd (GHCL), Nirma Ltd., DCW Limited (India), etc.
Source : ChemAnalyst
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