Tata Chemicals Ltd - Q4 FY11 Result Update

8/6/2019 Tata Chemicals Ltd - Q4 FY11 Result Update

http://slidepdf.com/reader/full/tata-chemicals-ltd-q4-fy11-result-update 1/3

Wealth Research, Unicon Financial Intermediaries. Pvt Ltd.Email: [email protected]

NG TERM INVESTMENT C ALL

ACCUMULATE1 June 2011

Company Report | Q4 FY11 Result Update

Q4 FY11 Result Highlights

Tata Chemicals Ltd (TCHL) posted Q4 FY11 result below streetexpectations, registering a topline growth of ~12% to INR 26,644mn.Growth in topline was supported by 10% rise in salt volume, 1000tones sale of i-shakti pulses and over 4 lakhs units sales of Swach units.

Low fertiliser revenue affected the topline of the company. TCHL’ssubsidiaries TCNA and IMACID posted revenue growth of 9% and41% YoY to INR 4.9bn and INR 1.2bn respectively.

EBITDA and EBITDA margin increased by ~19% and 101bps YoY toINR 4,863mn and 18.3% respectively.

Net Profit expanded by 20.3% YoY to INR 1,983mn while net profitmargin grew marginally by 53bps to 7.4%. Higher tax provision pulledthe bottomline of the company.

Capex: TCL is likely to add capacity of 50,000 TPA in SSP (Single SuperPhosphate) and 200,000 TPA in salt by March FY2012. Besides it is alsolooking to add 400,000 TPA in soda ash at the cost of USD 100mn.(Domestic demand for soda ash and sodium bicarbonate is expected torise by 5% and 14% respectively during FY2012.)

Outlook & Valuation

TCHL would maintain its growth momentum based on strong sales ofsoda ash (in US and India), acquisition of British Salt (UK) and growthin domestic agri-based business. Soda-ash & Salt divisions are

expected to maintain their trajectory in FY12. Soda ash business marginis expected to improve due to price hikes implemented by thecompany for CY11.

Acquisition of Rallis provides TCH immense opportunity to tap newmarkets in domestic region with a wider product range. Synergy benefits of these businesses would also boost margins for TCHL. Stockis trading at 13.9x its FY12E earnings and we recommendACCUMULATE with a price target of INR 416.

Industry ChemicalsCMP (INR) 382Target (INR) 416Upside / Downside (%) 1152 week High/Low (INR) 446 / 300Market Cap (INR MN) 92,3703M Avg. Daily Volumes 381,090P/E (FY12E) 13.9

Shareholding Pattern (%)

Stock Performance

Performance (%)1M 3M 12M

TCHL -5.9 11.5 18.0NSE Nifty -7.8 2.1 10.1

* Source: ACE Equity

(INR Mn)

Particulars ActualTotal Income 26,644EBIDTA 4,863Reported PAT 1,983* Source: ACE Equity, Unicon Research




Consolidated Financials(INR Mn)

Q4 FY11 Q4 FY10 Y-o-Y Q3 FY11 Q-o-Q FY11 FY10 Y-o-YNet Revenue 26,230 23,487 11.7 28,598 -8.3 108,946 94,487 15.3Other Operating income (OI) 347 190 83.0 311 -73.3 1,294 949 36.4Net revenue & OI 26,577 23,677 12.3 28,909 -8.1 110,241 95,436 15.5Other income 67 168 -60.3 316 -78.8 1,323 1,688 -21.6Total Income 26,644 23,845 11.7 29,224 -8.8 111,563 97,124 14.9Operating Exp. 21,714 19,584 10.9 24,495 -11.4 91,966 77,037 19.4EBITDA 4,863 4,093 18.8 4,414 10.2 18,274 18,398 -0.7EBITDA (%) 18.3 17.3 101 bps 15.3 303 bps 16.6 19.3 -270 bpsDepreciation 1,210 1,252 -3.3 1,115 8.6 4,511 4,468 1.0EBIT 3,719 3,009 23.6 3,615 2.9 15,087 15,618 -3.4EBIT (%) 14.0 12.6 134 bps 12.4 159 bps 13.5 16.1 -256 bpsFinancial charges 829 931 -11.0 802 3.5 3,508 3,932 -10.8PBT 2,890 2,078 39.1 2,813 2.7 11,578 11,687 -0.9Tax Provision 634 -11 NA 788 -19.5 2,749 2,093 31.3Tax Rate (%) 21.9 -0.5 2246 bps 28.0 -606 bps 23.7 17.9 583 bpsPAT 2,256 2,089 8.0 2,025 11.4 8,829 9,593 -8.0Adj. for Exceptional Item -273 -441 NA 62 NA -369 -2,358 NA

Reported PAT 1,983 1,648 20.3 2,087 -5.0 8,460 7,236 16.9Reported PAT (%) 7.4 6.9 53 bps 7.1 30 bps 7.6 7.5 13 bpsEPS 5.7 5.3 8.5 6.5 -11.5 25.6 24.9 3.0

Source: Company, Unicon Research




Unicon Investment Ranking Methodology

Rating Buy Accumulate Hold Reduce Sell

Return Range >= 20% 10% to 20% -10% to 10% -10% to -20% <= -20%

DisclaimerThis document has been issued by Unicon Financial Intermediaries Pvt. Ltd. (“UNICON”) for the information of its customers only. UNICON is governed bythe Securities and Exchange Board of India. This document is not for public distribution and has been furnished to you solely for your information and mustnot be reproduced or redistributed to any other person. Persons into whose possession this document may come are required to observe these restrictions. Theinformation and opinions contained herein have been compiled or arrived at based upon information obtained in good faith from public sources believed tobe reliable. Such information has not been independently verified and no guarantee, representation or warranty, express or implied is made as to its accuracy,completeness or correctness. All such information and opinions are subject to change without notice. This document has been produced independently of anycompany or companies mentioned herein, and forward looking statements; opinions and expectations contained herein are subject to change without notice.This document is for information purposes only and is provided on an “as is” basis. Descriptions of any company or companies or their securities mentionedherein are not intended to be complete and this document is not, and should not be construed as an offer, or solicitation of an offer, to buy or sell or subscribeto any securities or other financial instruments. We are not soliciting any action based on this document. UNICON, its associate and group companies itsdirectors or employees do not take any responsibility, financial or otherwise, of the losses or the damages sustained due to the investments made or any actiontaken on basis of this document, including but not restricted to, fluctuation in the prices of the shares and bonds, reduction in the dividend or income, etc. Thisdocument is not directed to or intended for display, downloading, printing, reproducing or for distribution to or use by any person or entity who is a citizenor resident or located in any locality, state, country or other jurisdiction where such distribution, publication, reproduction, availability or use would becontrary to law or regulation or would subject UNICON or its associates or group companies to any registration or licensing requirement within suchjurisdiction. If this document is inadvertently sent or has reached any individual in such country, the same may be ignored and brought to the attention of the

sender. This document may not be reproduced, distributed or published for any purpose without prior written approval of UNICON. This document is forthe general information and does not take into account the particular investment objectives, financial situation or needs of any individual customer, and itdoes not constitute a personalised recommendation of any particular security or investment strategy. Before acting on any advice or recommendation in thisdocument, a customer should consider whether i t is suitable given the customer’s particular circumstances and, if necessary, seek professional advice. Certaintransactions, including those involving futures, options, and high yield securities, give rise to substantial risk and are not suitable for all investors. UNICON,its associates or group companies do not represent or endorse the accuracy or reliability of any of the information or content of the document and relianceupon it is at your own risk.UNICON, its associates or group companies, expressly disclaims any and all warranties, express or implied, including without limitation warranties ofmerchantability and fitness for a particular purpose with respect to the document and any information in it. UNICON, its associates or group companies, shallnot be liable for any direct, indirect, incidental, punitive or consequential damages of any kind with respect to the document. No part of this publication maybe reproduced, stored in a retrieval system, or transmitted, on any form or by any means, electronic, mechanical, photocopying, recording, or otherwise,without the prior written permission of Unicon Financial Intermediaries Pvt. Ltd.

Contact:Wealth ManagementUnicon Financial Intermediaries Pvt Ltd.Ph: 022-4359 1200 / 100Email: [email protected] Visit us at www.uniconindia.in

Tata Chemicals Ltd - Q4 FY11 Result Update

Documents