Tata Stock Slumps 4% After Q4: Brokerage Sees 30% Slide Ahead

Tata Chemicals‘ share price was sliding on Tuesday morning after the company’s earnings for the March quarter seems to have disappointed investors.

What Happened: In the January-March quarter, the Tata Group company reported a net loss of ₹841 crore, marking a swing from the profit of ₹692 crore recorded during the same period a year ago. Tata Chemicals booked an exceptional one-time loss of ₹963 crore, primarily related to operations in the United Kingdom.

Additionally, revenue for the quarter dropped by around 20% to ₹3,475 crore compared to ₹4,407 crore in the year-ago period. Shares of the company were struggling on the bourses ahead of the results.

Reacting to the results, analysts at Kotak Securities maintained their “sell” rating for the stock cutting the target price to ₹770 from ₹780. The revised target implies an around 30% downside from the stock’s last closing price of ₹1,099.50.

See Also: Tata Stock Hits All-Time High After Q4 As Several Brokerages Raise Target Price

The brokerage said that the chemical major’s performance during the quarter was weak as expected, given the pricing pressure on soda ash across various regions. The analysts expect that earnings are expected to remain at current levels for most of FY25.

The brokerage pointed out that the persistent oversupply in the world soda ash market is a concern, with no visible signs of a substantial recovery in sight. The impairment charge recorded in the UK underscores the challenges faced by the company in navigating the current market conditions.

Furthermore, the brokerage added that any optimism surrounding a significant expansion into battery chemicals appears to be unfounded.

Price Action: Tata Chemicals’ share price was down 2.15% to trade at ₹1,075.85 in early trade on Tuesday.

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