Tata Chemicals net up five-fold on higher sales

MUMBAI: Tata Chemicals has recorded a five-fold increase in quarterly net profit due to higher sales and lower raw material costs.

The Tata Group company, which is in to salt, soda ash and fertiliser businesses, posted a net profit of `216 crore in the June quarter compared to `42.5 crore in the year-ago period. “The growth in profitability can be attributed to significant growth in demand of soda ash and salt,” said R Mukundan, managing director.

Net sales for the quarter grew 5.6% for the period. But the company is cautious about the rise in commodity prices in the near future. “We remain cautious because there could be a margin pressure due to a rise in input costs. Coal and fuel prices have already started picking up,” said Mr Mukundan.

Tata Chemical is the leader in the salt market with a 60% share. Its brands have recorded growth in the range of 10-20%. Sales of fertiliser have remained flat, the company said in a regulatory filing.

The company plans to expand operations as it thinks the economic slump is over. It will increase the manufacturing capacity of its branded salt from 5 lakh tonne to 8 lakh tonne and double the capacity of urea facility at Babrala in Uttar Pradesh in the next couple of years. It has an annual production capacity of 1.25 million tonne at Babrala.