After reporting flat revenue growth in the January-March quarter, Tata Chemicals Ltd. expects a revival in the financial year 2018-19.
Revenue of the maker of Tata Salt remained nearly flat at Rs 2,555 crore, the company said in its filings to the stock exchanges. Net profit rose 23 percent to Rs 356 crore year-on-year as margins expanded during the quarter.
Operating margin expanded to 20.1 percent from 18.9 percent in the same quarter last year even as raw material costs rose. “Raw material costs is a concern, energy costs have been increasing, we also expect due to the oil price change, the transportation costs will increase,” R Mukundan, managing director of Tata Chemicals told BloombergQuint in an interview.
He expects margins to remain at current levels as “positive market conditions” offset the negative impact of high input costs.
Tata Chemicals is focusing on expanding its consumer business and hopes to double the reach of its pulses to around 80,000 retail outlets in FY19. Revenue from this business will touch Rs 5,000 crore in the next three to four years, Mukundan said. The company has added nutrimixes like khichdi and chila mix to its portfolio and looks to launch more such products as it believes the market is still underpenetrated.
The company currently has become cash positive on a standalone basis, but it also plans to become debt free even on its consolidated basis, however, it won’t be in the current financial year. The company’s net debt stands at Rs 1,800 crore, said Mukundan.
Shares of Tata Chemicals have fallen 1.6 percent in 2018, compared to the 2.3 percent increase in the benchmark S&P BSE Sensex Index.