• Highest ever Revenue & Profit (before exceptional items)
• Strong performance from Fertilisers and Chemicals
• Strong Soda Ash demand both in India & overseas
• GCIP produces at record capacity driving margins
• Salt market-share improves 53.1 per cent
• New P&K policy positive for industry
• Overall good rainfall & agricultural outlook positive – robust Fertlizer demand
• Maiden dividend from Moroccan JV (IMACID)
• Babrala debottlenecking on schedule (completion by Dec 2008)

Q1FY09 Financial Highlights
Consolidated
Revenues at Rs 2,192 crore up 94 per cent YOY
Profit from operations increases 96 per cent to Rs 505 crore
Basic and Diluted EPS: Rs 4.57

Standalone
Revenues at Rs 1,207 crore up 80 per cent from Q1FY08
Profit from operations increases 57 per cent to Rs 270 crore
Basic and Diluted EPS: Rs 2.51

Tata Chemicals Limited, a leading manufacturer of chemicals, fertilisers and food additives today announced its consolidated & standalone financial results for the quarter ended June 30, 2008. The Company is the second largest manufacturer of soda ash and the third largest producer of sodium bicarbonate in the world, apart from being the leader in the Indian market. Tata Chemicals also enjoys leadership in the Indian edible salt market and is the most efficient manufacturer of urea fertiliser in the country.

Commenting on the Company’s performance for Q1FY2009, Mr. Homi Khusrokhan, Managing Director, Tata Chemicals, said, “I am delighted to report an excellent performance for the quarter under review. Many of the problems of last year are now behind us. Soda ash business continues to enjoy healthy demand and what is particularly encouraging is the strong performance of General Chemicals Industrial Products. With good overall rainfall, the agricultural outlook is good and will have a positive impact on fertiliser demand. Also, recent Fertiliser Policy changes will encourage efficiency in the fertiliser industry and Tata Chemicals is well poised to benefit from the new policies. This has been a good start to the year and we look forward to maintaining this momentum. However, the turbulence in the global economic environment cannot be ignored.”

PERFORMANCE SUMMARY

Q1 FY2009 (Apr – June 2008) v/s Q1 FY2008 (Apr - Jun 2007) (all figures consolidated)

• Income from operations (net of excise) at Rs 2,192 crore compared to Rs 1,129 crore in Q1 FY 2008, an increase of 94 per cent
• Profit from operations at Rs 505 crore higher by 96 per cent compared with Rs 258 crore in corresponding quarter last year
• Profit before exceptional items & tax was up by 110 per cent at Rs 352 crore; as against Rs 168 crore last year
• includes one time dividend from IMCID of Rs. 23 crore
• Profit after Tax (PAT) at Rs 107 crore compared with Rs 137 crore in Q1 FY 2008
• Basic and diluted EPS (not annualised): Rs 4.57

Q1 FY2009 (Apr – June 2008) v/s Q1 FY2008 (Apr - Jun 2007) (all figures standalone)

• Income from operations (net of excise) at Rs 1,207 crore compared to Rs 669 crore in Q1 FY 2008, an increase of 80 per cent
• Profit from operations at Rs 270 crore higher by 57 per cent compared with Rs 172 crore in corresponding quarter last year
• Profit before exceptional items & tax was up by 54 per cent at Rs 228 crore; as against Rs 148 crore last year
• PAT (excl forex loss) increased 103 per cent from Rs. 93 crore last year to Rs. 188 crore this year
• Profit after Tax (PAT) at Rs 59 crore compared with Rs 121 crore in Q1 FY 2008
• Basic and diluted EPS (not annualised): Rs 2.51

Exceptional item
Exceptional items for the quarter is a notional loss of Rs. 128.87 crore due to unrealised exchange loss or market to market restatement (under AS-11) of foreign currency borrowings including ECB raised to fund the purchase of GCIP.
This compares to an unrealised gain of Rs. 28.59 crore in Q1 FY08. This borrowing was completed at extremely fine rates. Given the fact that repayment of aforesaid borrowing commences only from June, 2012, it was not thought necessary to incur further hedging costs. Also, GCIP’s earnings are in US dollars.
The loss or gain in this regard is a non-cash accrual. As a prudent risk management policy, the Company does not enter into any forex derivatives which are speculative in nature

SEGMENTAL PERFORMANCE

A. CHEMICALS

• Domestic sales amounted to Rs 470 crore for the quarter ended June 30, 2008 & PBIT margins for the chemicals business stood at 24 per cent for the quarter

Soda ash

Performance perspective

• Tata Chemicals maintained its leadership position in the domestic soda ash market with an overall domestic market share of 32 per cent
• Sales volumes (including exports) for soda ash at Mithapur for the quarter ended 30 June 2008 stood at 166,000 tonnes.
• Domestic demand from all segments, namely detergents, glass and chemicals has been strong

Industry perspective and outlook

• Availability in China has improved marginally but supply continues to be tight
• Market conditions for soda ash in Europe have improved with the container glass segment driving growth even as flat glass is slowing down
• US soda ash demand has declined slightly as glass sales (flat, automotive and container) have started reflecting the overall slowdown in the economy
• Prices in India are expected to continue to be firm in line with the global trend

Consumer Products

• Tata Chemicals continues to be the market leader in the domestic edible salt market with a 53.1 per cent share in the national branded segment. Tata Salt’s current market share is at 43.4 per cent & I-shakti’s market share has risen to about 9.7 per cent
• A price increase of Re 1 on a 1 kg pack has helped combat the rising freight and packing prices owing to high crude prices

B. FERTILISERS

• Revenues for Q1FY09 from the fertiliser business were Rs 748 crore. Income enhanced further on the back of healthy demand. Under this new policy:
  • A new nutrient based MRP has been notified for all subsidized fertilisers
  • Phosphates receive Import Parity Pricing based subsidy
  • A uniform freight policy has been approved for all subsidised fertilisers
• Fertiliser PBIT margins stood at 17 per cent
• Strong demand drives sales volumes
• Work on debottlenecking of the Urea plant at Babrala is progressing on schedule and is expected to be completed by the end of this calendar year

C. FOREIGN SUBSIDIARIES AND JOINT VENTURES OVERVIEW

BMGL
Sharp rises in heavy fuel oil and electricity costs impact operations at the Magadi expanded facility
In response to increasing energy costs, BM Netherlands proposes to take a mid-contract price increase of 45 EUR/tonne effective 1st August 2008

GCIP
GCIP produced 630,000 tonnes of soda ash this quarter at almost 100 per cent capacity. Sales for the quarter amounted to 600,000 tonnes
Lower US sales in this quarter were compensated by ANSAC’s exports to Latin America and Asia

IMACID
Improved prices of phosphoric acid combined with better availability of rock phosphate and sulphur enabled considerably improved performance of IMACID
Sales volumes of IMACID were at 159,200 MT while production amounted to 168,800 MT

D. NEW BUSINESSES

Fresh Produce Business

• The first collection cum distribution centre at Melerkotla, near Ludhiana is operational.
• The first Cash & carry outlet has been opened in Ludhiana

Bio-fuels Business

• Construction of the Ethanol plant at Nanded is progressing smoothly. The plant is expected to be operational by the end of this year
• Inadequate rainfall in Maharashtra is however impacting cultivation of sweet sorghum