CARE Ratings assigned a stable outlook to Tata Chemicals (TCL) on Monday, reaffirming the company’s credit ratings despite ongoing challenges in the global soda ash market.
This reaffirmation highlights TCL’s robust business model and financial resilience, supported by its leadership position in the global soda ash industry and strategic importance within the Tata Group, the ratings agency said in an official statement.
CARE has reaffirmed TCL’s long-term bank facilities at ₹1,300 crore with a CARE AA+; Stable rating and short-term bank facilities at ₹2,000 crore with a CARE A1+ rating. Additionally, non-convertible debentures totaling ₹1,700 crore were reaffirmed at CARE AA+; Stable, while a new issuance of ₹1,500 crore in non-convertible debentures received the same rating. These ratings underscore TCL’s strong financial flexibility and refinancing capabilities, supported by Tata Sons Private Limited (TSPL), which holds a substantial stake in the company.
TCL’s strengths lie in its diversified operations across India, North America, Europe, and Africa, along with a comprehensive product portfolio that includes both basic chemistry and specialty products. As the world’s third-largest producer of soda ash, TCL boasts an annual production capacity of 3.98 million metric tonnes, with two-thirds derived from natural soda ash operations, ensuring cost-efficient production.
Challenging FY25
Despite a challenging FY25, marked by a decline in total operating income and profitability due to global oversupply and margin pressures, TCL’s operational performance remained stable. The first half of FY26 also saw subdued demand, but operational efficiencies led to improved margins. The soda ash business is inherently cyclical, with prices and demand closely tied to global economic conditions and industries such as glass, detergents, and lithium for electric vehicle batteries.
TCL’s resilience is evident in its strong demand in key markets like India and China, high-capacity utilization, and efficiency initiatives. The company’s total operating income for FY25 was ₹14,892 crore, down from ₹15,421 crore the previous year, with a contraction in the profit before interest, lease rentals, depreciation, and taxation (PBILDT) margin. However, TCL showed resilience with a PBILDT margin improvement to 18.14% in H1FY26, driven by softer coal prices and disciplined cost control.
The company’s liquidity remains robust, with consolidated cash and liquid investments of ₹1,136 crore as of the end of H1FY26. TCL’s moderate working capital utilization provides ample liquidity headroom, and its strategic importance within the Tata Group enhances its financial flexibility, allowing it to meet upcoming debt obligations through internal accruals and stable operating cash flows.
TCL is also committed to environmental, social, and governance (ESG) initiatives, aiming to reduce its carbon footprint by 30% by 2030. The company is investing in green chemistry and waste management practices, including 100% recycling of plastic waste. In FY25, TCL spent ₹22.54 crore on corporate social responsibility initiatives, focusing on socio-economic improvements, health, and education.
Despite the challenges in the global soda ash market, TCL’s strong operational and financial foundation, strategic importance within the Tata Group, and commitment to sustainability position it well for future growth. The reaffirmation of its credit ratings by CARE Ratings reflects confidence in TCL’s ability to navigate market volatility and maintain its industry leadership.