Despite the difficulties arising out of an earthquake and fire, both in the last financial year, Tata Chemicals has reported encouraging results in the first quarter of this financial year. The Profit Before Tax is Rs. 16.9 crore against a loss of Rs. 3.76 crore in the corresponding quarter last year.
The sales income has shown a decline, due to (a) lower soda ash production and sales after the March fire and (b) marginally lower urea sales arising out of sluggish market conditions. The operating margin, however, has improved from 23% last year to 28% this year in June quarter due to aggressive cost control measures at the production units. A very tight control is being exercised on fixed costs as well. Soda ash realisations have also improved.
Interest charges have also declined sharply from Rs. 47.00 crore last year to Rs 31.37 crore this year, through retiring higher cost debt, and tighter management of working capital and inventories.
The soda ash business continues to show steady growth and therefore the demand continues to be strong. The progress of the monsoon in the company’s urea markets has been good and the consumption should be better in the next quarter.
The renewal work at Mithapur after the fire in March 2001 is proceeding at a rapid pace, and the soda ash plant is expected to go back to full capacity from September 2001. Complete normalcy in all operations will be achieved by October, 2001.