Tata Chemicals Reports ₹21 Crore Q3 Loss Amid Soda Ash Plant Shutdown

4 Feb 2025 , 10:28 AM

Tata Chemicals Ltd reported a net loss of ₹21 crore in Q3 FY25, compared to a net profit of ₹194 crore in the same period last year. The loss was mainly due to an exceptional charge of ₹70 crore incurred for employee termination benefits, decommissioning of plant and machinery, and other closure-related expenses following the cessation of soda ash production at the Lostock plant in Northwich, UK.

Revenue from operations declined by 3.8% YoY to ₹3,590 crore, down from ₹3,730 crore in Q3 FY24. At the operating level, EBITDA fell by 19.9% YoY to ₹434 crore, compared to ₹542 crore in the corresponding quarter last year. EBITDA margin contracted to 12.1%, down from 14.5% in Q3 FY24, reflecting increased operating costs and pricing pressures.

Gross debt increased by ₹810 crore YoY to ₹6,722 crore, while net debt rose by ₹952 crore to ₹5,329 crore, primarily due to lower EBITDA and higher working capital requirements across the US, Kenya, and India.

The company commissioned a 70 KTPA pharma salt plant in the UK during the quarter, enhancing its production capacity. Sales and production volumes of soda ash, bicarbonate, and salt were higher compared to Q3 FY24, despite lower revenue.

Managing Director & CEO R Mukundan stated that Asia, including India, continued to experience growth, while markets like the US and Western Europe saw a slight decline due to reduced demand for flat and container glass. Mukundan attributed the weaker performance to lower soda ash pricing and higher fixed costs in the US due to a plant outage during the quarter.

The company is focusing on cost optimization, maximizing sales through better customer engagement, and ensuring steady contribution margins to navigate current market challenges. In the short term, the demand-supply imbalance is expected to persist, but long-term stabilization is anticipated, driven by growth in sustainability-linked sectors.