Synopsis:
A major chemicals maker has cleared a large multi-plant expansion plan that strengthens its capacity pipeline. The announcement has drawn investor attention as demand visibility improves across key end-user industries.
A chemicals stock/Tata Group stock opened strong after the company announced a major expansion plan across two of its manufacturing facilities. The update supported early sentiment as investors noted the scale of the proposed capacity build-out.
Tata Chemicals, with a market cap of Rs. 20,654.37 crore, opened at Rs. 830.50, which was also its intraday high, compared to the previous close of Rs. 809.95. This reflects an increase of 2.54 percent, placing the stock firmly in focus following the announcement.
What’s the News?
The Board of Tata Chemicals has approved a total investment of Rs. 910 crore to expand two critical product lines. The company will spend Rs. 135 crore to enhance dense soda ash capacity at its Mithapur plant, which currently operates at 1,091 kilo tonnes per annum with a 90 percent utilisation rate. Additionally, Rs. 775 crore has been sanctioned for expanding precipitated silica capacity at the Cuddalore facility, which presently produces 13.8 kilo tonnes per annum at an 86 percent utilisation rate.
The proposed additions include 350 kilo tonnes of dense soda ash annually at Mithapur over the next 24 months and 50 kilo tonnes of specialty silica annually at Cuddalore over the next 27 months. These expansions will be financed through internal accruals and other options. The rationale behind the investments is to meet rising demand, soda ash for sustainability-driven applications and specialty silica for the growing needs of the rubber and automotive tyre industries.
Financial Snapshot – Q2FY26
Quarter-on-Quarter, revenue increased from Rs. 3,719 crore to Rs. 3,877 crore, a rise of 4.24 percent. Operating profit declined from Rs. 649 crore to Rs. 537 crore, down 17.22 percent. Profit before tax fell from Rs. 360 crore to Rs. 236 crore, a decrease of 34.44 percent. Net profit dropped from Rs. 316 crore to Rs. 154 crore, down 51.26 percent.
Year-on-Year, revenue slipped from Rs. 3,999 crore to Rs. 3,877 crore, a decline of 3.05 percent. Operating profit decreased from Rs. 618 crore to Rs. 537 crore, down 13.11 percent. Profit before tax fell from Rs. 348 crore to Rs. 236 crore, lower by 32.18 percent. Net profit declined from Rs. 267 crore to Rs. 154 crore, dropping 42.32 percent.
About the Company
Part of the over USD 165 billion Tata Group, Tata Chemicals Limited serves as a key supplier to the glass, detergent, industrial, and chemical sectors. The company holds a strong foothold in crop protection through its subsidiary Rallis India and operates advanced research and development centres in Pune and Bangalore.
Written b y Manan Gangwar
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