Tata Chemicals witnessed a decline in its share price by over 4% on Tuesday following the company’s announcement of a net loss of Rs 841 crore in the fourth quarter of FY24, contrasting with a net profit of Rs 692 crore reported in the same period a year ago.
During Q4FY24, Tata Chemicals disclosed a non-cash write-down of assets amounting to Rs 963 crore concerning its UK operations, particularly the Lostock Plant, categorized as an exceptional loss.
The Tata Group company experienced a 21.1% decline in revenue for the quarter ended March 2024, dropping to Rs 3,475 crore from Rs 4,407 crore year-on-year.
Consolidated EBITDA witnessed an 18% quarter-on-quarter decrease and a significant 54% year-on-year decline, failing to meet analysts’ estimates by 11%.
India EBITDA also experienced a 7% quarter-on-quarter dip and a 26% year-on-year decrease, attributed to softness in soda ash sales volumes and pressure on realizations, which outweighed higher sales volumes of salt.
Brokerages on Tata Chemicals
Motilal Oswal on Tata Chemicals
According to a recent report by Motilal Oswal, Tata Steel faces short-term challenges in the soda ash demand-supply dynamics, particularly due to weak demand in Western Europe. This has led to suppliers, predominantly from Turkey, exporting soda ash beyond Europe, consequently impacting global prices adversely.
Despite these challenges, the report suggests a balanced outlook in the medium term, driven by the emergence of new applications such as solar glass and lithium-ion batteries.
Motilal Oswal’s report indicates that they are broadly maintaining their FY25/FY26 EBITDA estimates for Tata Steel. The brokerage reiterates its Neutral rating on the stock and assigns a Sum-of-the-Parts (SoTP)-based target price of Rs 980.
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