Tata Chemicals is a leading producer of soda ash and iodized salt in India. In the past year, the company's net revenue increased 6.7% and profit after tax grew 9.7%. Various ratios show the company's improved profitability, returns, and liquidity compared to the previous year. However, some ratios like inventory turnover and debtors turnover indicate room for improvement. The company has strengths in its brands and R&D but also faces weaknesses in global penetration and threats from labor issues and regulations.

1. TATA CHEMICALS
BY GROUP 9

2. GROUP NO. 9
SUNDRAM SINHA
●
SHAHBAAZ AHMED
●
SALONI RAMAN MISHRA
●
RAJNI VASISHT
●
SHRAVAN
●
SWATI
●

5. Company Credentials
World’s second largest producer
of soda ash
India’s market leader in the
branded, iodised salt segment
Leading player in the domestic
crop nutrients space
Manufacturing facilities across 4
continents – Asia, USA, UK, Africa

6. Company Profile
TATA
Chemicals
Living
TATA Salt
I Shakti
Farm
Essentials
Industrial
TATA Swach
Soda Ash,
Sodium Bicarb
Urea

7. DIRECTOR’S REPORT
 The net revenue from operations of the
company increased a growth of 6.7 %.
 Profit before tax and whereas the profit after
tax was an increase of 8.0% and 9.7%
respectively.
 The consolidated net revenue shows an
increase of 7.6% over the previous year.

12. PROFITABILITY RATIOS
• PROFIT MARGINPROFIT AFTER TAX/SALES
• GROSS PROFIT MARGIN• GROSS PROFIT = SALES-COGS
• GROSS PROFIT MARGIN = GROSS PROFIT/SALES
• 2012= 13.00% AS AGAINST 2011= 11.43%
• PROFITABLE BEFORE SUBTRACTING R&D , ITD EXPENSES

13. OPERATING PROFIT MARGINOPAOPERATING PROFIT- GROSS PROFIT-SGA-R&D
• OPERATING MARGINOPERATING PROFIT/SALES
• 2012- 16.68%, AS AGAINST 2011- 15.67%
• HIGH PROFITS AFTER DEDUCTING GROSS PROFIT AND
EXPENSES.

14. NET PROFIT MARGIN• NPMNET PROFIT- SALES-COGS-SG&A-R&D-ITD
• NET PROFIT MARGIN=
NET PROFIT/SALES
• 2012= 5.99%, AS AGAINST 2011= 5.88%
• PROFIT AFTER INCURRING ALL ITS EXPENSES

15. RETURN ON ASSETS
• ROAPROFIT AFTER TAX/AVERAGE TOTAL ASSETS
• 2012= 251.93 Cr, AS AGAINST 2011= 214 Cr.
• MORE EFFICIENT, BETTER PROFITS

16. RETURNS ON EQUITY
• ROEPROFIT AFTER TAX/ AVERAGE SHAREHOLDER’S
EQUITY.
• 2012= 13.17%, AS AGAINST 2011= 11.96%
• BETTER AT CREATING PROFITS COMPARED TO
THEIR PERSONAL INVESTMENT

17. EARNINGS PER SHARE
• EPSNET PROFIT AFTER MINORITY EXPENSE/ WEIGHTED
AVERAGE NO. OF EQUITY SHARES.
• 2012= 31.85%, AS AGAINST 2011= 24.06%
( REPORTED)
• MORE EARNINGS FOR SHAREHOLDERS, MORE PROFIT

18. LIQUIDITY RATIOS
• CURRENT RATIOCURRENT ASSETS/ CURRENT LIABILITIES
• 2012= 1.03, AS AGAINST 2011- 1.20
• HIGH ASSETS TO PAY FOR ITS LIABILITIES

19. QUICK RATIO• Q.RQUICK ASSETS/CURRENT LIABILITIES
• 2012= 0.83, AS AGAINST 2011= 0.92
• QUICK ASSETS ARE NOT EASILY CONVERTED TO
CASH.
• LESS ASSETS TO PAY FOR LIABILITIES.

20. INVENTORY TURNOVER RATIO• ITRCOST OF GOODS SOLD/ AVERAGE INVENTORIES.
• 2012= 7.54 Cr. , AS AGAINST 2011= 11.71Cr.
• GOODS ARE NOT SOLD FAST.

21. DEBTORS TURNOVER RATIO• DTRNET CREDIT SALES/AVERAGE DEBTORS
• RATIO SHOWS HOW MUCH TIME DEBTS ARE
COLLECTED
• 2012= 7.51, AS AGAINST 2011= 8.80
• RECEIVABLES ARE NOT COLLECTED RAPIDLY

22. SOLVENCY RATIOS
• DEBT EQUITY RATIOSECURED LOANS+UNSECURED LOANS/
SHAREHOLDER’S EQUITY.
• 2012= 0.93, AS AGAINST 2011= 1.05
• HIGH STAKE OF OWNER, MORE SAFETY AGAINST
SHRINKAGE OF ASSETS

23. INTEREST COVER• INTEREST COVERPROFIT BEFORE INTEREST AND TAX/ INTEREST
EXPENSE.
• 2012= 4.60 TIMES, AS AGAINST 2011= 4.53
TIMES
• HIGHER CONTRACTUAL PAYMENTS

24. CAPITAL MARKET RATIOS
• PRICE EARNINGS RATIOSAVERAGE STOCK PRICE/EARNINGS PER SHARE.
• COMPANY IS MORE EXPENSIVE BASED ON THEIR
EARNINGS.

25. SWOT ANALYSIS
STRENGTH
WEAKNESS
OPPORTUNITIES
THREATS
• MONOPOLY IN PRODUCTS LIKE
IODIZED SALT, WATER
PURIFIER.
• LIMITED GLOBAL
PENETRATION
• LOW PENETRATION OF
AGRICULTURAL PRODUCTS TO
AVOID DISTRIBUTION IN
MARKET.
• CONTRACTORS AND LABOR
STRIKES IN HALDIA.
• STRONG WORKFORCE
• BRAND LOYALTY
• STRONG R&D SETUP
• RENOVATIONS IN MITHAPUR,
GUJARAT DUE TO
EARTHQUAKES, LABOR
STRIKES ETC.
• SEED RESEARCH AND
DEVELOPMENT WITH JOINT
VENTURE WITH SINGAPORE
BASED COMPANY.
• SETUPS IN AFRICA CAN BRING
REVENUES IN FUTURE.
• STRINGENT TRADE
REGULATIONS.
• UPRISINGS OVER THE
CONSTRUCTION OF SODA AS
PLANTS IN TANZANIA.