Tata Chemicals Q3 Review — Margins Under Pressure Due To Lower Pricing, Says Motilal Oswal, Retains 'Neutral'

NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.

Motilal Oswal Report

Tata Chemicals Ltd.’s Q3 FY25 consolidated Ebitda declined 20%/30% YoY/QoQ due to lower realisations YoY (while sequentially, realizations have marginally inched up), higher fuel and freight costs, plant production outage in the US, and unfavorable operating leverage across geographies.

The management has indicated that soda ash pricing will stabilize at lower levels over the next three to six months, led by the demand-supply imbalance. In terms of geographic outlook, the Indian, Asian, and U.S. markets are expected to continue the growth momentum, while the Western Europe market is expected to remain flattish or witness a marginal decline.

Factoring in the weak Q3 performance, we cut our FY25 Ebitda estimates by 11%. The closure of the Lostock plant in the UK (~8% of total revenue in FY24) and lower levels of realization in the near term can result in lower profitability. Hence, we cut our FY26/FY27 Ebitda estimate by 10%/6%. Reiterate our Neutral rating with an SoTP-based target price of Rs 1,030.

Click on the attachment to read the full report:

DISCLAIMER

This report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.