BENGALURU (Reuters) – India’s Tata Chemicals reported a decline in profit for the third successive quarter on Monday, hurt by lower soda ash prices and soft demand.
Soda ash, the company’s largest business, suffered last year as falling caustic soda prices made it more appealing than soda ash for the silicate market, prompting it to cut prices to stay competitive.
The segment comprises about two-thirds of its total sales volume, with the U.S. being its largest market.
Consolidated net profit fell 60% from the previous year to 1.58 billion rupees ($19 million) in the three months ended Dec. 31.
The Tata Group-owned company had cut prices of its key products light and dense soda ash twice last year – by 3%-4% in April and about 5.5% in August. The combined price cuts eroded its revenue in the latest quarter.
Meanwhile, soda ash sales volume fell about 10% in the quarter, leading to a proportionate decline in total revenue to 37.30 billion rupees.
Sales of salt, which accounts for about a third of Tata Chemicals’ total sales volume, remained largely unchanged.
The demand was challenging in the container glass and flat glass sectors in Europe and the Americas, which led to pressure on volumes and prices, Managing Director and CEO R. Mukundan said in a statement.
Tata Chemicals supplies raw materials to the glass, detergent, industrial and chemical sectors.
Last week, larger rival UPL reported a quarterly loss, hurt by weak demand and destocking issues.
($1 = 83.0120 Indian rupees)
(Reporting by Varun Vyas in Bengaluru; Editing by Dhanya Ann Thoppil)
Disclaimer: This report is auto generated from the Reuters news service. ThePrint holds no responsibilty for its content.