Tata Chem

The company announced on Wednesday that it was shutting down its operations at its fertiliser plant at Babrala for the purpose of the planned, regular, major maintenance program generally taken once in two years. The shutdown is starting from March 22, 2016 and will approximately last for 30 days. However, company has assured that this will not have material financial impact on the company. The market was not convinced and the stock ended the day in the red.

Despite the company’s assurances the worry is probably because its performance for Q3FY16 was not good. Its consolidated net sales dropped 4% (YoY) at Rs.4637 crore. EBITDA dropped by 17% to Rs.490 crore and net profit came in at Rs.130 crore, a major drop of 45%. The company said that volumes were impacted due to production outages and extreme weather conditions. Plus, Rallis India performance was impacted due to adverse climatic conditions, weaker yields and lower prices of key crops. The subsidy receivable was at Rs.1,577 crore as on 31st December 2015.

Another news to consider – FII holding in Tata Chemicals hit the trigger limit following which the RBI has said further purchase of equity in the company by overseas investors will require approval. As of December 31, promoters held 30.98% , while 69.02% was held by the public, of this , FPIs own 22.86%.