Tata Chemicals share price falls over 4% on weak Q4 results; Kotak Equities cuts target price

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₹841 crore in the fourth quarter of FY24 as against a net profit of ₹692 crore in the same period a year ago. Tata Chemicals said during Q4FY24 it recognised a non-cash write-down of assets with respect to UK (Lostock Plant), aggregating to ₹963 crore which has been disclosed as an exceptional loss. The Tata Group company’s revenue in the quarter ended March 2024 declined 21.1% to Rs 3,475 crore from ₹4,407 crore, YoY.

Also Read: UltraTech Cement share price extends gains after strong Q4 results. Should you buy, sell or hold the cement stock? Consolidated EBITDA fell 18% QoQ and 54% YoY and missed analysts’ estimate by 11%. India EBITDA dipped 7% QoQ and 26% YoY, amid softness in soda ash sales volumes and pressure on realizations, which more than offset higher sales volumes of salt.

Kotak Institutional Equities said Tata Chemicals reported weak earnings for 4QFY24, as expected, amid pricing pressure on soda ash across geographies. “Earnings seem likely to remain near current run-rates through most of FY2025 in the context of continued oversupply; the large impairment charge in the UK is perhaps an indication. We now cut US EBITDA per tonne estimate for FY2025 from $45 to $35 and thereafter assume a recovery to $40 in FY2026," Kotak Institutional Equities said.

Also Read: Trent shares hit a fresh record high on Q4 boost, up 218% in 1 year. Should you buy the stock after Q4 result? Its revised EPS estimate for FY2025 stands reduced by 20% to ₹25.9, while FY2026 falls by 12% to ₹31.4. Despite the collapse in earnings, the stock has held up surprisingly well, perhaps in hopes of an IPO of Tata Sons — which, however, does not seem to be happening, given news that Tata Sons is working on repaying debt to avoid going public.