Tata Chemicals Q4: PAT to erode 73% YoY; decline in soda ash price to weigh on co.'s revenue

The Tata Group's commodity chemicals company Tata Chemicals is all set to report its Q4 earnings on Monday (April 29, 2024). Zee Business Research desk estimates the company to post a 17.6 per cent decline in consolidated revenue to Rs 3630 crore for the March quarter as against Rs 4407 crore in the same quarter over the previous year.

EBITDA, a measure of operating profitability, is also likely to take a hit and come in lower by a sharp 45 per cent on year to Rs 530 crore as against Rs 965 crore in the same period last year.

Similarly, margin profit at the firm is expected by analysts to come in at 14.6 per cent for the review period as against 22 per cent in the year-ago period. Analysts see the sharp contraction given the high-employee as well as power costs.

Consequently, on a significant drop in revenue, PAT at the company is likely to decline 72.6 per cent to Rs 195 crore from Rs 711 crore reported in Q4FY23.

Soda ash is an essential raw material in the making of glass, and Tata Chemicals is India's largest manufacturer of this basic industrial chemical. Now as the price of soda ash is seeing constant price decline, analysts see it to weigh substantially on the company's revenue.

Further, the company's business from the international markets is also likely to be subdued as revenue from both Kenya and North America is expected to fall by 22 per cent and 32 per cent, respectively.

Also, the company is likely to see an impact due to the seasonal slowdown and fall in exports of Rallis India.

Key monitorable

Investors should keep an eye on the pricing trend as well as demand outlook for soda ash.

Tata Chemicals Q3

In the quarter-ended December 2023, the company's consolidated revenue was at Rs 3768 crore, while operating margins also were down at 14.53 per cent as against 22.23 per cent in the same-quarter a year-ago. Further, net profit more than halved to Rs 158 crore as against Rs 391 crore in the same quarter a year-ago.