Tata Chemicals Releases Q2 & H1 FY26 Earnings Call Transcript, Discusses Mixed Results and Growth Plans

* Tata Chemicals Limited released the transcript of its Analysts/Investors Call for the unaudited consolidated and audited standalone financial results for the second quarter and half year ended September 30, 2025. The call was held on Monday, November 3, 2025. * Industry Overview: Global demand for key products is expected to be flat near-term, with stable demand in Europe, Africa, America, India, and Asia (excluding China). Demand in China is slightly down, and Southeast Asia remains weak. The medium to long-term outlook is positive due to solar PV and EV growth, despite short-term margin challenges and persistent geopolitical risks. * Soda Ash Market: The market remains oversupplied, with high inventory levels globally, especially in China (16.5 lakh tonnes). Prices weakened significantly in Q2 FY26, with Chinese soda ash prices declining by 56-58% between Q2 FY23 and Q2 FY26 due to new capacity. Cash margins are under pressure, with most Chinese production at negative cash margins. Average import prices into India range between ₹19,340 and ₹19,684 ($232 and $236). The Minimum Import Price (MIP) in India has been extended until 2025, and an anti-dumping duty recommendation has been submitted by DGFT. Subdued pricing is expected for the rest of the year. * Standalone Financial Highlights (Q2 FY26): * Revenue from operations increased by 19%. * EBITDA rose by 67% to ₹240 crore. * Profit After Tax (PAT) grew by 80% to ₹178 crore. * Consolidated Financial Highlights (Q2 FY26): * Revenue marginally decreased by 3% to ₹3,877 crore, primarily due to the reconfiguration in the UK, which resulted in zero Lostock sales this quarter. * EBITDA was lower at ₹537 crore (compared to ₹618 crore in Q2 FY25) due to lower volumes and realization. * PAT was impacted by one-time events totaling approximately ₹105 crore, including a ₹65 crore provision in the UK for contractual obligations post-cessation of Lostock operations, and a $5 million (approx. ₹40 crore) reduction in US work-in-progress. * Operational Performance by Geography: * India: Performance improved with higher volumes and operational efficiency. Sales volume of FOS increased to 858 metric tonnes (Q2 FY26) from 675 metric tonnes (Q2 FY25). Soda Ash volumes increased by approximately 30,000 tonnes, salt by 50,000 tonnes, and Bicarb by 14,000 tonnes year-on-year. * US: Export volumes and prices were lower, while domestic sales remained at par. * UK: Reconfiguration is complete, with a focus on value-added non-cyclical products. The company expects to turn positive in Q3 FY26 and definitely by Q4 FY26. * Kenya: Experienced lower sales volumes due to shipment delays, but these issues have been resolved for the second half of the year. A pending litigation with the County Government was resolved in the company's favor, and tax-related issues were settled with a payment of approximately ₹16 crore. * Rallis: Reported a 7% de-growth in revenue, 10% de-growth in volume, and 3% price growth, with EBITDA at 18%. * Future Plans and Outlook: * The company plans to issue ₹1,500 crore in Non-Convertible Debentures (NCDs) for general corporate purposes, including growth initiatives. * Plans to de-bottleneck and expand Indian capacity in phases, aiming for a total 50% increase in Indian capacity (an additional 5 lakh tonnes of Soda Ash, with 1.5 lakh tonnes expected quickly). * Also looking to augment Bi-carb capacity and add Silicate capacity (42,000 tonnes in Cuddalore and 60,000 tonnes in Mithapur). * FOS capacity of 5,000 tonnes of L55 has been commissioned, with a focus on reaching 80% utilization. * The previously targeted ₹600 crore savings for the year are now expected to be around 75% achieved, primarily due to rupee depreciation against the UK pound and pressure on US export pricing. * Net debt increased in H1 due to currency impact (₹250 crore) and higher inventory. No long-term debt is maturing in H2 FY26. * Management Commentary: R. Mukundan, MD & CEO, stated, "While the immediate short-term pressure on the soda ash pricing would continue and it is going to remain range-bound, we are looking to normalization as we move forward, both from the capacity front as well as the geopolitics tariff front. In addition to which, we welcome the move of ADD from DGFT. We hope that this resolves continued pressure in the product pricing. And over a period of time, we continue to be positive on the Indian market."