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- Q1FY13 results were in line with estimates. Co reported consol revenues of Rs 30.7bn, 4% yoy while consolidated APAT stood at Rs 1.6bn, -24% yoy (after adj of Rs 615mn of FX loss).
- Strong chemical margin in domestic business & strong profitability in US operations supported bottomline despite disruption in domestic fertilizers.
- Though global demand for soda ash remained stable in Q1, however management shared cautious outlook due to slowdown in China
- Q1FY13 operations were affected by multiple factors however business has normalized from current quarter.
Tata Chemicals is the world`s second largest producer of soda ash with manufacturing facilities in India, UK, Kenya and USA. Tata Chemicals is also a leading manufacturer of urea and phosphatic fertilisers and, through its subsidiary, Rallis, has a strong position in the crop protection business. The company has also entered into a JV with Temasek Life Sciences Laboratory (TLL), Singapore for development of jatropha seedings and agronomic package of practices.
Tata Chemicals said the two units of Di-ammonium Phosphate (DAP) at the company`s Haldia plant have resumed the operations. The operations at two units were suspended during the period from 1 April 2012 to 3 July 2012 due to disruption in supplies of Phos Acid, the company said. The operations at the Magadi plant of Tata Chemicals Magadi in Kenya, a wholly owned subsidiary of the company, have resumed operations after it remained partially disrupted during the quarter ended June 2012 due to flooding caused by heavy rains.
We recommend to buy and hold Tata chemicals (Futures) in the range of 309 to 314 for a target of 323, 330+ with a stop loss of 302.
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