₹4,218 crore. This is the slowest growth seen in the past nine quarters, at least.
In Q1, growth was led by better price realization, altho-ugh this was offset by weak volumes across markets, including the US and India. Muted revenue growth and a sharp rise in other expenses took a toll on the Ebitda margin, which fell by 70 basis points to 24.7%.
Tata Chemicals shares are down 2.8% in the past two trading days since Q1 results. While it is positive that the company’s capital expenditure plans are on track, weak outlook on soda ash prices may exert pressure on near-term profit margin.
Meanwhile, the stock trades about 17% below its 52-week high, and any potential upside on the stock is capped until demand recovers. Kotak Institutional Equities has cut FY24-25 earnings per share estimates by 8-13%.
“Our earnings cuts are driven primarily by lower margin assumptions across geographies, as we expect soda ash prices to weaken further," they said in a report dated 9 August. A large portion of capacity additions may pay off only after FY2025-26, according to Kotak.Get the best recommendations on Stocks, Mutual Funds and more based on your Risk profile!
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