Tata Chemicals

The global soda ash market remains oversupplied, primarily driven by high inventory levels in China, which reached $1.8 billion this quarter. Management noted that while demand is growing as projected, the issue is fundamentally a supply-side problem from unviable units. Import prices in India have remained range-bound between $230 and $235, and the company expects pricing to stay at these levels for the next 6 to 9 months.

Tata Chemicals is undergoing a significant turnaround in its U.K. operations following the cessation of the Lostock facility. The company is targeting a ₹200 crore bottom-line improvement from this move alone. Key future drivers include the start of in-house CO2 production and the qualification of pharmaceutical-grade salt, with the goal of reaching PAT breakeven by the end of FY26.

The India business continues to be a strong performer, with higher volumes and operational efficiencies offsetting minor drops in realizations. Sales volumes for all products increased, with FOS reaching 869 metric tons. The company plans a 320,000-ton soda ash expansion in Mithapur through debottlenecking, which is expected to be more cost-effective than a full greenfield expansion.

In a move reflecting market caution, management has paused the U.S. soda ash expansion for at least a few quarters. While environmental approvals and design work are complete, the 'green signal' will only be given when market conditions clear. Maintenance CAPEX is expected to remain steady at approximately ₹1,000 crores annually across all geographies.

Rallis India emerged as a bright spot this quarter, reporting 22% overall growth driven by both Crop Care and Seeds. Volume growth stood at 9% while price growth was 13%. This led to a doubling of PAT and an EBITDA margin of 16%, signaling a strong recovery in the agrochemical segment.