Tata Chemicals shares: Tata Chemicals saw its shares drop by more than 4% in early trading on Tuesday following the announcement of its first quarterly loss in nine years. The company reported a net loss of Rs 850 crore for the January–March 2024 quarter, compared to a profit of Rs 709 crore in the same period last year.
The UK (Lostock Plant) was the subject of a non-cash asset write-down that the corporation recorded, amounting to an extraordinary loss. Revenue from operations decreased by 21.1 percent for the quarter to Rs 3,475 crore, year over year.
Tata Chemicals’ stock dropped by 4.44% to Rs 1050 compared to the previous closing price of Rs 1099.
Over the past year, the stock has gained 12.41% but has declined by 4.21% in 2024. A total of 1.41 lakh shares of the company were traded, resulting in a turnover of Rs 15.01 crore on BSE. The market capitalization of the company decreased to Rs 27,289 crore on Tuesday.
In terms of technical indicators, the stock’s relative strength index (RSI) currently sits at 48.9, indicating that it is neither oversold nor overbought. Tata Chemicals has maintained a one-year beta of 0.7, suggesting very low volatility over the past year. Presently, Tata Chemicals shares are trading below the 5-day, 20-day, and 50-day moving averages, but they are above the 100-day, 150-day, and 200-day moving averages.
The soda ash manufacturer experienced a 21.1% decline in revenue, dropping to Rs 3,475 crore in the fourth quarter, compared to Rs 4,407 crore in the same period last year.
The business stated that the impairment is mostly the result of unfavorable market conditions, decreased demand for soda ash in Europe, and the jurisdiction’s ongoing poor pricing outlook, which served as the foundation for the negative revision of the cash flow predictions. The non-cash write-down of the cash-generating unit, which includes property, plant, and equipment valued at Rs 821 crore, capital work-in-progress valued at Rs 122 crore, right-of-use assets valued at Rs 4 crore, and other assets (net) valued at Rs 16 crore, related to the UK Group operations, is represented by this impairment of Rs 963 crore, according to Tata Chemicals.
Motilal Oswal remarked that the operating performance of the Tata Group company fell short of their expectations. They assigned a neutral rating along with a price target of Rs 980.
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According to Motilal Oswal, Tata Chemicals (TTCH) witnessed a 54% year-on-year decline in consolidated EBITDA for the fourth quarter of fiscal year 2024. This was primarily attributed to subdued operational performance across various regions, with India, the US, the UK, and Kenya experiencing declines of 26%, 68%, 72%, and 57% respectively compared to the previous year. They stated that they are largely maintaining their EBITDA estimates for fiscal years 2025 and 2026, and they reaffirm their Neutral rating. Their target price of Rs 980 is based on a Sum-of-the-Parts (SoTP) valuation approach.
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