Shares of Tata Chemicals rose over 10 percent on Wednesday after the company reported a whopping 86 percent rise in its net profit for the first quarter of financial year 2023 mainly on higher realization.

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The stock was trading 10.77 percent higher at Rs 1060 per share on BSE at the time of writing. It has gained 26.8 percent in the last one month.

The company reported its Q1 results on Tuesday with the profit coming in at Rs 637 crore against Rs 342 crore during the same period last year. The revenue is up 34.2 percent year-on-year (YoY) at Rs 3,995 crore versus Rs 2,978 crore.

Earnings before interest, taxes, depreciation, and amortization or EBITDA — a measure of a company's overall financial performance — grew 86.9 percent to Rs 1,015 crore against Rs 601 crore last year while EBITDA margin stood at 25.4 percent as compared to 20.2 percent in Q1 FY22.

The company said that Q1 performance is a result of improved realizations, efficient cost management and optimum capacity utilization even as market conditions remained adverse owing to rising input and energy costs.

It added that the demand across products remains positive globally, however, the logistic challenges and high input cost are a worry.

Overall expenses went up to Rs 3,273 crore against Rs 2,655 crore while cost of production rose to Rs 1,931 crore from Rs 1,473 crore.

The company’s key products are soda ash, soda bicarbonate, cement, salt, marine chemicals and crushed refined soda.

While soda ash production was down marginally at 8.85 lakh tonnes (lt) from 8,96 lt, bi-carb and salt production rose to 58,000 tonnes from 55,000 t and 4.18lt from 4.08 lt, respectively.

Source: Tata Chemicals

The company has the largest saltworks in Asia, and is the 3rd largest soda ash manufacturer and the 6th largest sodium bicarbonate manufacturer in the world.

Tata Chemicals has prepaid debt of $30 million in Q1.

Source: Tata Chemicals

“The Global economic outlook is cautiously optimistic due to the headwinds of rising inflation, supply chain disruptions and increased energy prices caused by geopolitics. The Indian economy is expected to remain one of the fastest growing economies in FY 2022-23. Tata Chemicals is well positioned to continue its growth journey in FY 2022-23,” MD and CEO R. Mukundan had said in the company’s annual report for FY22.

First Published:Aug 10, 2022 12:31 PM IST