Higher sales volumes, efficient operations drive realisations for Q1 FY2007
July 27, 2006

	Tata Chemicals standalone Q1FY07 Net Sales up 49 per cent
	Profit from operations up 40 per cent
	PAT Rs. up 16 per cent

Commenting on the company's performance for Q1FY2007, Prasad Menon, Managing Director, Tata Chemicals, said, "Tata Chemicals' financial and operating performance during the quarter under review has been strong. Production and sales volumes of all our products have increased significantly. This combined with all round efficiencies and lower input costs has enabled a healthy increase in realisations. Further, having ensured consistent availability of inputs and having commenced the second phase of our efficiency enhancement programme; I believe Tata Chemicals is optimally positioned to deliver superior stakeholder value."

The company's income from operations (net of excise) was higher by 49 per cent at Rs 757 crore from Rs 510 crore. This increase has been driven by significantly higher sales volumes across all products. Enhanced fertiliser trading activity in line with Tata Chemicals' endeavour to enhance its association with the farmer and become a complete agri solution provider further improved income from operations.

Profit from operations too grew by a healthy 40 per cent to Rs 161 crore compared to Rs 115 crore. This increase was despite a 21 per cent rise in staff costs on account of wage revisions and provision for retirement benefits.

Profit before tax and net profit after tax were both up 16 per cent at Rs 110 crore and Rs 75 crore despite a net foreign exchange loss of Rs 24.8 crore incurred during the quarter.

The basic and diluted EPS (for the quarter) was Rs 3.50.

Note: All comparative financials in this communication are on a Tata Chemicals standalone basis.

Segmental performance
Chemicals

Soda ash
Tata Chemicals' market share (including imports) increased to 33.6 per cent as against 29.4 per cent in Q1 06 on the back of healthy demand traction. Dense soda ash comprised 32 per cent of total soda ash sales for the quarter under review. Further, the company exported 17.000 MT in Q1 FY07.

Increasing freight costs combined with a tight supply-demand balance necessitated a Rs 350 per ton price increase with effect from June 29.

Food additives
Market share of Tata Salt at the end of quarter was 51.6 per cent within the national branded segment and at 22.6 per cent in the overall iodized salt segment. During the quarter, Tata Salt was relaunched in a new contemporary pack design which has been well received across all regions by trade as well as by consumers.

Fertilisers
Nitrogenous (Urea)
Urea sales volumes continue to be healthy. Tata Chemicals remains the most energy-efficient player in the industry with an energy consumption level of 5.17 Gcal/ton for in Q1 FY07.The company has submitted an application for the production of 50,000 MT neem-coated urea in the current financial year and the approval is awaited.

Phosphatics (NPK, Di ammonium phosphate)
Assured supply of phosphoric acid as a result of the company's stake acquisition in IMACID Spa enabled significantly higher DAP and NPK fertiliser sales in the quarter under review.

Financial management
Interest costs were Rs. 0.77 crore in Q1 FY07, a decline of 60 per cent compared to the corresponding period last year. Total debt as on June 30, 2006 stood at Rs 1,345 crore of which low cost short term debt used towards mainly the phosphatics business was Rs 529 crore.

Note: Some of the statements in this document that are not historical facts are forward looking statements. These statements are based on the present business environment and regulatory framework. We assume no responsibility for any action taken based on the said information, or to update the same as circumstances change.