Costs erased revenue growth as Tata Chemicals swung to a loss
Operating margin fell 4.73 percentage points YoY as expenses grew 13.65%, while a Rs 44 cr tax charge left the company with a Rs 50 cr loss.
Filed 07 Nov 2026, 17:10 IST · after market close · Tata Chemicals Ltd (TATACHEM)
Key takeaways
- Operating margin fell 4.73 percentage points YoY to 9.12% as expenses grew 13.65%, faster than revenue at 7.74%.
- Tata Chemicals reported a consolidated net loss of Rs 50 cr after a Rs 44 cr tax charge, despite Rs 115 cr of other income.
- Its 9.12% operating margin was 3.71 percentage points below the 12.83% median for 137 reported Commodities peers.
Price around the results
Revenue growth did not translate into operating profit
On a consolidated basis, revenue rose 7.74% YoY, but operating profit fell 29.05% as expenses increased 13.65%. Sequentially, revenue declined 1.83% and operating profit fell 31.35%, indicating weaker momentum after the Q1FY27 improvement. Management said higher India revenue, volumes and the Novabay acquisition supported the year-on-year revenue increase.
Input costs and Kenya suspension squeezed margins
Expenses grew 2.59% QoQ while revenue fell 1.83%, so operating margin narrowed 3.92 percentage points to 9.12%; the YoY decline was 4.73 percentage points. Management attributed the EBITDA pressure to higher input and fixed costs and the temporary suspension of Kenya operations. Interest rose 4.86% YoY and depreciation increased 23.16%, while the Rs 115 cr of other income did not prevent a Rs 6 cr loss before tax; the Rs 44 cr tax charge then took net profit to a Rs 50 cr loss.
Margin remains well below its earlier FY26 level
Operating margin has fallen from 17.45% in Q1FY26 to 9.12% in Q2FY27, despite recovering to 13.04% in Q1FY27 from 7.97% in Q4FY26. The current margin was 3.71 percentage points below the 12.83% median among 137 Commodities peers that had reported. This keeps cost control central to the next quarter's operating performance.
Expansion plans remain active despite the cost pressure
Management said the 85 TPH biomass boiler project at Mithapur was progressing as planned and that heat-recovery projects were underway across plants. The company also said it plans an 82.5 KTPA IVSD plant at Mithapur, a 50 KTPA precipitated silica plant at Cuddalore, a 210 KTPA IVSD plant at Valinokkam and a 40 KTPA bicarbonate facility in Singapore.
No immediate market reaction after the filing
The results were filed after market close, so there is no current price reaction to assess. After the previous eight results, the stock rose once and fell seven times, with a median absolute move of 1.72%; the historical pattern has therefore been mostly negative but generally modest in size.
Q2FY27 at a glance
Consolidated figures as filed with NSE — cross-checked against an independent source.
| Line item | Q2FY27 | Q1FY27 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹4,177 cr | ₹4,255 cr | -1.83% | +7.74% |
| Other income | ₹115 cr | ₹39 cr | +194.87% | -10.16% |
| Expenses | ₹3,796 cr | ₹3,700 cr | +2.59% | +13.65% |
| Operating profit | ₹381 cr | ₹555 cr | -31.35% | -29.05% |
| Operating margin (%) | 9.12% | 13.04% | — | — |
| Interest | ₹151 cr | ₹148 cr | +2.03% | +4.86% |
| Depreciation | ₹351 cr | ₹336 cr | +4.46% | +23.16% |
| Profit before tax | ₹-6 cr | ₹110 cr | — | — |
| Tax | ₹44 cr | ₹50 cr | -12.00% | -46.34% |
| Net profit | ₹-50 cr | ₹60 cr | — | — |
| EPS (₹) | ₹-4.79 | ₹-0.67 | -614.93% | — |
Operating margin of 9.12% compares with a Commodities sector median of 12.83% across 137 peers that have reported Q2FY27.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
This quarter
- Revenue was higher than the prior-year quarter, driven by higher revenue in India, higher volume and the Novabay acquisition.
- The Novabay acquisition added to revenue during the quarter.
Expansion
- An 85 TPH biomass boiler project at Mithapur is progressing as planned.
- The company plans an 82.5 KTPA IVSD plant at Mithapur, Gujarat.
- The company plans a 50 KTPA precipitated silica plant at Cuddalore, Tamil Nadu.
- The company plans a 210 KTPA IVSD plant at Valinokkam, Tamil Nadu.
- The company plans a 40 KTPA bicarbonate facility in Singapore.
New initiatives
- Heat recovery projects are in progress across various plants.
- The Greening Initiative planted 81,365 saplings and 80,000 mangrove saplings.
Problems & risks
- Increases in input and fixed costs affected EBITDA.
- Temporary suspension of Kenya operations affected EBITDA.
What to watch
- Whether operating margin holds above 9.12% after the 3.92-percentage-point QoQ decline.
- Whether revenue momentum improves from the 1.83% QoQ decline while expenses grow 2.59%.
- Whether profit before tax moves above the current Rs 6 cr loss and the Rs 44 cr tax charge moderates.