Motilal Oswal's research report on Tata Chemicals
TTCH’s 2QFY25 consolidated EBITDA declined 25% YoY, due to lower realizations YoY, higher freight costs and unfavorable operating leverage across geographies, while sequentially it improved by 7.7% on recovery across geographies, except India.As per the management, soda ash prices have bottomed out (also last price cut was in Nov’23 for domestic market by TTCH) and can improve going ahead, with stable demand-supply scenario globally. We maintain our FY25/FY26 EBITDA estimates as we anticipate a steady recovery in the soda ash demand-supply scenario globally. Reiterate our Neutral rating with an SoTP-based TP of INR1,070.
Outlook
We expect 2HFY25 to witness further recovery in margins, led by healthy volume across geographies and favorable operating leverage. We reiterate our Neutral rating with an SoTP-based TP of INR1,070.
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