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International weakness offsets India performance Operating performance misses estimates

* Tata Chemicals (TTCH) posted a muted performance in 2QFY27, with consol. EBITDA declining 29% YoY to INR3.8b (est. INR5.3b). The muted performance was primarily due to declines in EBIT at TCNA/TCEHL/Rallis by 96%/77%/20% and TCAHL reporting an operating loss of INR200m following the suspension of its Kenya operations (vs. EBITDA of INR180m YoY)

* Indian standalone business reported healthy performance (EBITDA up 22% YoY), driven by higher volumes in salt and higher realizations across products. Domestic demand remains healthy, supported by solar glass capacity additions and infrastructure investments, although pricing remains under pressure due to imports and higher domestic supply.

* International operations remained weak due to global soda ash oversupply, Chinese export pressure and elevated energy and logistics costs. Near-term realizations are expected to remain range-bound, with recovery dependent on supply rationalization and demand growth.

* Factoring in a weak 2QFY27 performance, we cut our consolidated FY27/FY28 EBITDA estimates by 13%/12%. We reiterate our Neutral rating with an SoTP-based TP of INR600

Weak consolidated performance amid overseas operating pressures

* TTCH reported overall revenue of INR41.8b in 2QFY27, up 8% YoY (est. in line). EBITDA margin contracted by 470bp YoY to 9% (est. ~12.2%); EBITDA stood at INR3.8b (est. INR5.3b), down 29% YoY.

* Adj. net loss of INR1.2b vs. Adj. net profit of ~INR1.3b in 1QFY27 (est. adj net profit of ~INR1.2b).

* For 1HFY27, Revenue grew 11% YoY, while EBITDA declined 215 YoY. Adj Loss stood at INR1.4b vs Adj profit of INR3.8b. Gross debt stood at INR69b vs INR71b as of Mar’26. The company reported a CFO of INR640m vs. INR5.4b in Sep’25.

* The Living Essentials business grew 11% YoY to INR11.9b. EBIT was INR850m (vs. EBIT of INR550m YoY). EBIT margin stood at 7%.

* The Industry Essentials business grew 5% YoY to INR22.6b. Loss before interest and taxes was INR1.2b (EBIT of INR160m in 2QFY26). EBIT margin stood at -5.3%.

* The Farm Essentials business remained flat at INR8.6b. EBIT was INR940m (down 27% YoY). EBIT margin stood at 11%.

* The Indian standalone/TCNA revenue grew ~8%/16% YoY to INR13.0b/ INR14.9b while TCEHL/TCAHL declined 3%/45% to INR3.9b/INR710m. Rallis revenue remained flat at INR8.5b.

* EBITDA for Indian standalone grew 22% to INR2.9b while EBITDA at TCNA/ TCEHL/Rallis declined 96%/77%/20% to INR2.1b/INR30m/INR90m/INR1.3b. TCAHL reported an operating loss of INR200m vs EBIT of INR180m YoY.

* EBITDA/MT of TCNA stood at USD0.5 (vs. USD15 YoY). TCAHL reported an operating loss/MT of USD62 (vs. USD36 YoY). EBITDA margin for Indian standalone expanded 250bp YoY to 22.4%. EBITDA/MT for TCEHL stood at GBP8 (vs GBP37 YoY).

Valuation and view

* The near-term environment remains challenging, with the soda ash demandsupply balance yet to meaningfully improve despite expectations of future demand from solar glass and electric vehicles. Benefits from these end-use industries are likely to play out gradually, while the current oversupply persists.

* Further, diversification from the commodity business (primarily soda ash) to the specialty segment/batteries is also expected to pay off for TTCH in the mediumto-long run.

* We expect TTCH to record a revenue/EBITDA CAGR of 9%/20% over FY26-28. Reiterate Neutral with an SoTP-based TP of INR600.

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