During fiscal 2024, TCL’s consolidated revenue saw a year-on-year decline of around 8%, mainly on account of lower realizations and reduced volumes, owing to muted demand and pricing pressure faced across the industry.

Realizations for the domestic segment are expected to remain subdued on account of higher expected supply levels owing to commissioning of domestic capacities while volumes are expected to increase on the back of favorable near-term demand outlook, especially from the glass sector.

Among international businesses, the operations in the US improved marginally due to improved realizations despite reduced volumes owing to disruptions on account of plant maintenance and rail car shortage during fiscal 2024.

The company’s UK operations witnessed a revenue decline of around 9% to Rs 2,404 crores during fiscal 2024 as against Rs 2,629 crores during fiscal 2023, along with 11% drop in volumes during the period, as it faced muted demand.

The operations in Kenya also faced demand headwinds with overall revenue decline of 32% while volumes moderated by 15% during fiscal 2024.

Overall, gross debt stood at Rs 5,064 crore as on March 31, 2024, against Rs 6,083 crore as on March 31, 2023. The company prepaid further debt in 2024 as cash accrual improved and is expected to continue the same with incremental accruals to be utilized towards repayment of debt in the US business. The company is also planning to raise NCDs on its standalone books, to repay the debt outstanding under its intermediate holding companies in Singapore and UK.

Financial flexibility remains strong by virtue of a being part of the Tata group. Liquidity is also cushioned by cash and equivalent of Rs 645 crore as on 31 March 2024, and outstanding liquid investments of Rs 615 crore. The company also had quoted equity investment in other Tata group companies valued at around Rs 6,451 crore as on 27 May 2024.

The rating continues to reflect the strong business risk profile of TCL, driven by its established market presence in diversified markets, and healthy financial risk profile because of strong liquidity and financial flexibility. These strengths are partially offset by susceptibility to price volatility in the soda ash business.

Tata Chemicals manufactures soda ash and related chemicals, including sodium bicarbonate, caustic soda and bromides. Its subsidiary, Rallis, is one of the leading players in the domestic crop protection sector, and manufactures pesticides, herbicides and fungicides at its factories.

The scrip shed 0.49% to currently trade at Rs 1038.70 on the BSE.