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- 04 Feb 2025
- ICICIdirect Research
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TATA CHEMICALS REVENUES DE-GREW 4 PERCENT YOY TO RS 3590 CRORE
TATACHEM - 914 Change: 4.80 (0.53 %)News: Tata Chemicals revenues de-grew 4% YoY to ₹ 3590 crore tracking ~13% de growth in Rallis (15% of the revenues). Ex-Rallis revenues (mainly Soda Ash) stood at ₹ 3068 crore, flat sequentially and down 2% YoY. While revenues from North America Soda Ash sales (35% of the revenues) and India Soda Ash sales (~32% of the revenues) stood flattish YoY to ₹1273 crore and ₹1166 crore respectively, UK and Kenya de-grew YoY. EBITDA de-grew 20% YoY to ₹ 434 crore and margins stood at 12.1% (down 244 bps) affected by 194 bps decline in Rallis margins to 8.4%, 100 bps decline in North America margins to 11%and 100 bps decline in India to 18%.
View:Pricing scenario continues to be weak whether it is India or North America. Overall, 5% increase in volumes at the overall level was undone by ~7% realization decline at the overall level. China and India continued to experience stable growth, while US and Western Europe are witnessing decline due to reduced demand for flat and container glass. The company has decided to cease operations due to unviable economics. As per management, in China, the prices have dropped by almost 25-30% and some plants are operating even below cash cost level. China has now turned exporter and is dumping mainly in SE Asia. The management expects weakness to persist for another 3-6 months as the new capacities in Mongolia may force many Chinese companies to shut shop. The company has decided to recalibrate the capex with staggered execution.
Impact: Negative