Tata Chemicals Q2 results: Net profit drops 55% as soda ash prices slip, freight costs rise

Tata Chemicals had cut soda ash prices last November

Tata Chemicals reported a near 55% year-on-year fall in its second-quarter profit on Thursday, hurt by lower soda ash prices and higher freight costs. The chemical maker's consolidated net profit fell to 1.94 billion rupees ($23.1 million) for the quarter ended Sept. 30 from 4.28 billion rupees a year earlier.

While revenue from operations rose 0.03% to 39.99 billion rupees for the quarter, total expenses rose nearly 7% to 38.03 billion rupees, with freight and forwarding charges rising nearly 32%.

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KEY CONTEXT

An economic downturn in China and stagnant demand in the EU have hit prices of soda ash, which is the primary business segment for Tata Chemicals.

Globally, soda ash prices fell nearly 23% during the quarter, according to analysts at brokerage Nirmal Bang.

Tata Chemicals had cut soda ash prices last November.

Analysts had flagged that chemical companies could face higher expenses due to an increase in container and freight costs amid the Middle East crisis.