What explains Tata Chemicals touching new highs amid tough market conditions?

Tata Chemicals is currently one of the world’s largest soda ash manufacturers, not only in India but also in the world. The stock recently rallied 7% despite overall weak markets after its results for Q4 turned out to be extremely flattering. For instance, its net profits for Q4 grew manifold from Rs.29 crore to Rs.470 crore on a yoy basis, as Tata Chemicals is getting attuned to the new model where it has already hived off its salt business to TCPL.

If you look at the top line of Tata Chemicals, sales revenues for Q4 grew 32% yoy at Rs.2,636 crore and this was largely driven by the basic chemicals business and not so much the specialty chemicals or the performance chemicals. It also witnessed improved realizations across geographies. However, Tata Chemicals also faced a surge in input costs. The company is currently expanding capacity of bicarb and silica with capex of Rs.2,000 crore this year.