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Tata Chemicals' Q3 FY2009-10 net profit surges up by 133 per cent to Rs212 crore
Mumbai, October 29, 2010

Q3 FY2009-10 profit before tax at Rs338 crore, up by 89 per cent
Q3 FY2009-10 profit from operations at Rs445 crore, up by 53 per cent %

Business Highlights
High volumes, lower energy consumption drive urea business
Rallis contributes strongly to bottom line
Soda ash, demand growth encouraging, India markets expands approximately 12 per cent
Consumer products business drives robust growth, ‘Tata Swach’ launched in Maharashtra, on its way to lead the category
International operations performance encouraging; global demand improving

Q3 FY2009-10 financial highlights
Net profit at Rs212 crore compared to Rs91 crore, up 133 per cent
Profit before tax up by 89 per cent to Rs338 crore
Profit from operations increases to Rs445 crore up 53 per cent

Nine months FY2009-10 financial highlights
Net profit: Rs478 crore
Diluted EPS (not annualised): Rs20.31

Note: “Rallis India (Rallis) had become an associate of the company in August 2009. Consequent to the preferential allotment of 980,000 equity shares by Rallis to the company in November 2009, the effective holding of the company in Rallis has become 50.06 per cent. Accordingly, Rallis has become the subsidiary of the company from associate and from the said date it is consolidated on a line-by-line basis. Net profit of the group for the quarter and nine months ended December 31, 2009 includes Rs11.92 crore and Rs21.59 crore respectively, on account of Rallis.”

Tata Chemicals, a leading manufacturer of chemicals, fertilisers and food additives today announced it’s consolidated and stand-alone financial results for the quarter ended December 31, 2009. The company is the second largest manufacturer of soda ash and the third largest producer of sodium bicarbonate in the world, apart from being the leader in the Indian market. Tata Chemicals also enjoys leadership in the Indian edible salt market and is the most efficient manufacturer of urea fertiliser in the country.

Commenting on the company’s performance for the quarter and nine months ended December 31, 2009 of FY2009-10, R Mukundan, managing director said:

“I am happy to report strong performance for the quarter under review. We are seeing encouraging signs across the businesses.

On the fertiliser front, our urea operations were at optimal levels. Moreover healthy volume growth and low energy utilisation have contributed significantly to profitability. Our strategy of increasing speciality portfolio through acquisition of Rallis and organic growth within Tata Chemicals is yielding rich dividends. Implementation of customised fertiliser project is on track. We are also encouraged by the successful launch of our water purifier “Tata Swach” which we believe has considerable potential. We are also happy to report that board has cleared investment which will take our branded salt up by 50 per cent in the next 24 months. These moves are in line with our focus on the growing speciality and consumer portfolio. I must also highlight the significant savings we have made through our cost efficiency programme ADAPT.

We remain cautious about the external environment as we do believe the signs of resurgence in demand could be short-lived if there is early withdrawal of stimulus package and tightening of monetary and fiscal policies around the world.”

Year – on – year consolidated performance comparision
Q3 FY2009-10 (October to December 2009) v/s Q3 FY2008-09 (October to December 2008)
Net profit at Rs212 crore compared to Rs91 crore, up 133 per cent.
Profit before tax was up by 89 per cent at Rs338 crore, as against Rs178 crore last year.
Profit from operations at Rs445 crore, higher by 53 per cent compared with Rs290 crore in corresponding quarter last year.
Income from operations (net of excise) at Rs2,650 crore compared to Rs3,669 crore in Q3 FY2008-09.
Basic EPS (not annualised): Rs9.03.
Diluted EPS (not annualised): Rs9.03.

Nine months FY2009-10 (April to December 2009) v/s Nine months FY2008-09 (April to December 2008)
Net Profit at Rs478 crore compared with Rs476 crore in the first nine months of FY 2008-09.
Profit before tax down by 5 per cent to Rs769 crore, as against Rs809 crore last year.
Profit from operations at Rs1,107 crore decreased by 22 per cent compared with Rs1,418 crore in the corresponding period last year.
Income from operations (net of excise) at Rs7,276 crore compared to Rs10,733 crore in the first nine months of FY 2008-09
Basic EPS (not annualised): Rs20.31
Diluted EPS (not annualised): Rs20.31

SEGMENTAL PERFORMANCE

A) Inorganic chemicals
Domestic sales amounted to Rs487.5 crore for the quarter ended December 31, 2009.
However, Chinese and other imports continues to be a significant threat..

Soda ash

Performance perspective
Tata Chemicals maintained its leadership position in the domestic soda ash market.
Sales volumes (including exports) for soda ash at Mithapur for the quarter ended December 31, 2009 stood at 171,400 tonnes..
Benefits of price increases taken in the European markets earlier in the year have enabled strong contribution.
European bicarbonate production volumes are fully sold for the year.
The implementation of ADAPT at Magadi has resulted in considerable cost cutting and enabled the company to better compete with Chinese inputs.
Demand in the US domestic market continues to grow strongly. GCIP is operating at full capacity.
Sales out of the US to neighbouring markets also improving.
   
Industry perspective and outlook
Soda ash demand in the Indian market is estimated to have grown at 12 per cent for the first three quarters in FY2009-10.

Consumer Products
Sales volumes of edible salt improved by close to 20 per cent Y-o-Y9.
All brands namely Tata Salt, I Shakti and Tata Salt Lite continue to do well.
Tata Chemicals’ market leadership in the domestic edible salt market broke its own record again and reached an all-time high of 61 per cent in the national branded segment.
Tata Salt continues at number one position with market share of about 44 per cent.
I-Shakti continues as the second largest salt brand. Its national branded market share is 16 per cent. Cooking soda launched under I-Shakti umbrella.
Tata Salt Lite continues to receive an encouraging response.
‘Tata Swach’ launched in Maharashtra, on its way to lead the category.

B) Fertilisers
Domestic sales for Q3 FY2009-10 from the crop nutrition business were Rs1,054.5 crore
Urea operations continue to be at optimal levels on the back of healthy demand.
Strong volume growth combined with continuing low energy utilisation levels contributed well to profitability.
A capacity of 240,000 tonnes of neem coated urea is operational. This is part of the full production capacity of 1.2 million tonnes at Babrala.
Tata Chemicals also proposes to double its urea capacity at Babrala. The investment involved in doubling of the urea facility is estimated to be around Rs3,500 crore. The company will commence work in the project on receiving some assurance with regard to gas availability.
Phosphatic fertiliser operations are stabilising.
Speciality fertiliser sales extremely strong.
The company’s customised fertiliser capacity of 130,000 tonnes is expected to be operational in August 2010.
Stable commodity prices resulted in improved performance during the quarter at IMACID, Morocco.

C) Other agri-inputs (Rallis)
The acquisition of Rallis India, in which Tata Chemicals has a 50.06 per cent stake, has proved to be extremely accretive for the company.
Financial highlights for the quarter under review:
  Profit after tax at Rs24 crore for the third quarter has grown by 55 per cent over the same period last year..
  The company has recorded PBT before exceptional items of Rs41 crore during Q3, a rise of 58 per cent from last year's figure of Rs26 crore.
  During the quarter, profitability improved, achieving EBITDA margin of 22 per cent compared to 15 per cent in the same period in the previous year. The improvement in EBITDA margin has been achieved through better portfolio mix and improved quality of operations including efficient control over working capital..
Several new products introduced by the company have been well received.

Awards
The Babrala fertiliser unit won the prestigious Excellent Energy Efficient Unit Award 2009.

Note: *All sales volumes exclude Inter Unit and Trading quantities
**All production volumes are gross