Tata Chemicals dips 2% after Q1 profit declines 12% on lower operating margin

Tata Chemicals Q1 profit drops 12% YoY to Rs 523 crore on lower operating margin

Shares of Tata Chemicals tanked nearly 2 percent in early trade on August 8 after muted results for the June quarter. At 9:30am, the stock was trading 1.23 percent lower at Rs 1,024 on the NSE.

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The Tata Group company registered a consolidated profit of Rs 523 crore for the quarter ended June FY24, shedding 11.8 percent from the corresponding period last fiscal, dented by lower operating margin. Revenue from operations grew by 5.6 percent year-on-year to Rs 4,218 crore, while EBITDA increased by 2.8 percent to Rs 1,043 crore, but margin fell 70 bps in Q1FY24.

Brokerage views

Morgan Stanley has given an ‘equal weight’ rating to the Tata Chemical stock with a target price of Rs 916 per share. “The stock reported highest ever EBITDA as margin surprised positively offsetting lower volumes. Commentary on pricing and cost management will be key to watch,” the brokerage firm said.

Motilal Oswal has given a ‘neutral’ rating to the Tata Chemical stock in a post-results report released on August 7. It further stated that the performance of the stock was in-line with estimates.

Stock performance

The Tata Chemicals stock has given a return of 1.03 percent over the last six months. The stock has thus underperformed the benchmark Nifty50 index that has given a return of 9.66 percent over the same duration.

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