Motilal Oswal: Tata Chemicals Strong Operational Performance, Barring Africa; Chinese Firms Increasing Global Supply
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Motilal Oswal Report
Tata Chemicals Ltd.’s FY20 Annual Report highlights its performance across key product categories and geographies. FY20 was a year of restructuring for Tata Chemicals as its Consumer Products division was demerged and merged with Tata Consumer Products Ltd. (TCPL) with an equity swap ratio of 1:14. Tata Chemicals revenue/Ebitda in FY20 grew 0.2%/9.5% to approximately Rs 103 billion/Rs 19.5 billion.
Tata Chemicals India Soda Ash business reported revenue decline of 10% to Rs 14.8 billion, primarily due to significant 9% drop in volumes (to 634 kilo metric tonne) and 1% decline in realizations. This was due to an oversupplied market (including increased imports) and decline in Soda Ash prices.
Tata Chemicals North America (TCNA) revenues declined marginally by 0.3% YoY to 480 million U.S. dollar in FY20, mainly due to 1% drop in realizations (to 215 U.S. dollar per metric tonne).
However, this was offset by marginal 0.6% increase in sales volume (to 2.23 million metric tonne). TCNA revenue (in Rs. terms) inched up 1% YoY to Rs 34 billion while Ebitda increased 8.5% YoY to Rs 7.4 billion.
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