Tata Chemicals Shares Drop Nearly 4% After Posting Q3 Net Loss
Tata Chemicals shares experienced a nearly 4% decline on Tuesday, dropping by Rs 35.5 to trade at Rs 911.1 per share, following the company’s announcement of a net loss of Rs 21 crore for the third quarter (Q3) ending December 2024.
Mumbai: Tata Chemicals shares experienced a nearly 4% decline on Tuesday, dropping by Rs 35.5 to trade at Rs 911.1 per share, following the company’s announcement of a net loss of Rs 21 crore for the third quarter (Q3) ending December 2024.
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Tata Chemicals Reports Decline in Revenue and Operating Performance
The company’s revenue from operations for the quarter saw a decline of 3.8%, dropping to Rs 3,590 crore in Q3, compared to Rs 3,730 crore in the same period last year (Q3 FY24). Additionally, EBITDA (Earnings Before Interest, Tax, Depreciation, and Amortisation) dropped sharply by 19.9%, falling to Rs 434 crore from Rs 542 crore in the corresponding quarter of the previous year.
The EBITDA margin for Q3 stood at 12.1%, down from 14.5% in Q3 FY24, reflecting a significant decline in the company’s operating performance.
Increased Debt Burden and Global Market Impact
The company’s financials also showed a significant increase in debt. Gross debt rose by Rs 810 crore, reaching Rs 6,722 crore as of December 31, 2024. In addition, net debt rose by Rs 952 crore, reaching Rs 5,329 crore, primarily due to lower EBITDA and higher working capital requirements across Tata Chemicals’ operations in the US, Kenya, and India.
R Mukundan, Managing Director and CEO of Tata Chemicals, stated that while Asia, including India, continues to experience growth, markets in the US and Western Europe are facing slight declines due to reduced demand for flat and container glass. Mukundan explained that the company’s overall performance was affected by lower soda ash pricing across various regions and higher fixed costs in the US, largely due to a plant production outage during the quarter.
Expansion and Production Growth Amid Challenges
Despite the challenges, Tata Chemicals made strides in expanding its specialty products portfolio by commissioning a 70 KTPA pharma salt plant in the UK during Q3. Additionally, the company reported higher sales and production volumes of soda ash, bicarbonate, and salt compared to the same quarter last year (Q3 FY24).
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Tata Chemicals’ overall performance in Q3 highlights both opportunities in specialized markets and challenges due to global demand shifts and increased operational costs.
