Driven by the company is currently loss-making, small-cap size, which brings sharper price swings, falling profits.
In simple words: The company is currently losing money, though profits are falling even as sales grow. The direction of profits is the main factor to watch.
The 60-second version of Tata Chemicals Limited — what it does, how it earns, and who it competes with, before any of the numbers below.
What does this company do?
Tata Chemicals Limited, together with its subsidiaries, manufactures, markets, sells, and distributes basic chemistry and specialty products in India, Asia, Africa, Europe, the United Kingdom, the Americas, and internationally.
IndustryChemicals
SectorBasic Materials
Employees4,437
Annual revenue₹14,397 Cr
How does it make money?
Turns over ₹14,397 Cr a year. Of every ₹100 of sales, about ₹-13 reaches shareholders as profit, with ₹2 left at the operating level before interest, tax and depreciation. Each of its 4,437 employees supports ₹3.24 Cr of revenue a year, the signature of a capital- or asset-led business.
Revenue / employee₹3.24 Cr
Who are its competitors?
The closest listed comparisons in its industry are PIDILITE INDUSTRIES LTD, SRF LTD, UPL LIMITED. These are the companies its valuation and returns are measured against elsewhere in this report.
What is its competitive advantage?Little sign of one
Returns on capital of -3.0% are at or below what the capital likely costs. That is the financial pattern of a business competing largely on price, where advantage has to come from execution rather than position.
Peer median ROE15.4%
What is the outlook?
8 analysts covering the stock expect revenue to grow about 7.2% and earnings to grow about 88.3% in the year to 2028. These are estimates by people who follow the company, not a forecast for the wider industry.
Est. revenue growth+7.2%
Est. earnings growth+88.3%
Analysts8
What has been driving growth?
Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved -14% while net margin moved -195% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.
Revenue effect-14%
Margin effect-195%
DalalBaazaar Score
35/ 100
Weak
Weighted across six categories. Every point is explained below.
✗ Revenue has contracted at 4.8% a year
✗ Profit fell 906.8% in the latest year
Quality vs. Valuation
Company Quality
30/ 100
Weak
How good the business is, ignoring the share price entirely.
vs
Valuation
30/ 100
Expensive
What you are being asked to pay, ignoring how good the business is.
Weak on business quality and not cheap enough to compensate.
vs. its own history
Not enough price and earnings history
vs. sector peers
Not enough peers with a usable P/E
vs. generic bands
N/A
No P/E — the company is lossmaking
EV/EBITDA
79.3x
PEG
—
What's Good / What's Bad
🟢 What's Going Well0
Nothing stands out as clearly improving on the years of data available.
🔴 What Needs Attention2
Return on equity is falling
ROE has dropped from 11.7% to -8.9% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 10.2% to -3.0% — often a sign of competition or overexpansion.
Red Flags
6 items require attention · 3 high · 3 watch
🔴Thin interest coverageFinancial
Operating profit covers interest only -1.9x — little room if earnings dip.
🔴The company is lossmakingFinancial
Net profit of -₹1,896 Cr in the latest reported year.
🔴Significant margin compressionFinancial
EBITDA margin has fallen 21.4 points, from 23.5% to 2.1%.
🟡Debt is increasingFinancial
Total debt is up 27% over 3 years.
🟡Interest coverage is deterioratingFinancial
Cover has fallen from 2.1x to -1.9x.
🟡Inventory building faster than salesFinancial
Inventory up 22% against revenue up -14% — stock may not be moving.
Investment Thesis
🟢 Bull CaseWhat could make this work?
Self-funding with balance-sheet headroom
Positive free cash flow of ₹64 Cr alongside low debt means growth, buybacks or dividends need no outside money — and a downturn can be absorbed rather than refinanced.
🔴 Bear CaseWhat could go wrong?
Margins are being competed away
EBITDA margin has fallen from 23.5% to 2.1%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
The debt load needs earnings to hold up
Debt is 26.7x EBITDA. At that level a downturn in earnings turns a manageable balance sheet into a refinancing problem, and lenders get paid before shareholders.
Returns on shareholder capital are falling
ROE has dropped from 11.7% to -8.9%. Each rupee of equity earns less than it did, so profit growth increasingly depends on raising more capital rather than on the existing base working harder.
Earnings are hard to forecast
Profit has swung sharply from year to year, so any single year — good or bad — is a weak guide to the next. Cyclical earnings deserve lower multiples for that reason.
Size brings its own risk
Small Cap businesses are thinly traded, so exits are harder in a falling market and single events move the price more than they would for a larger company.
🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today
1EBITDA margin holds above 0%✓ 2.1%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Debt / EBITDA falls below 3x✗ 26.7x
Already stretched, so this is a reduction target rather than a level to hold. Around 3x is where lenders typically start attaching conditions.
3Interest cover stays above 3x✗ -1.9x
How much operating profit can fall before interest stops being comfortably covered.
4Free cash flow remains positive✓ ₹64 Cr
Profit that never becomes cash eventually stops being profit.
5ROCE stays above 8%✗ -3.0%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.
Investment Checklist
6 / 12 checks passed
✗ Strong return on equity (ROE ≥ 15%)
✗ Strong return on capital employed (ROCE ≥ 15%)
✗ Healthy net margin (≥ 10%)
✓ Generates positive free cash flow
✓ Manageable leverage (Debt/Equity < 1.0)
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✓ Revenue growing year-over-year
✗ Profit growing year-over-year
✓ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high
✗ Analyst consensus isn't majority-sell
✗ Short-term technical trend isn't bearish
Price history
Quick Metrics
4 good · 2 neutral · 5 weak
Market Cap
₹16,177 Cr
Small Cap
Smaller company — thin liquidity and deep drawdowns are normal here
P/E (Trailing)
Not meaningful
Loss-making
Earnings are negative, so a P/E multiple can't be read here
P/B Ratio
0.76x
Reasonable
Reasonable against the company's book value
EPS (TTM)
₹-84.98
Loss-making
Negative earnings per share — the business is losing money
ROE
-8.9%
Weak
Weak capital efficiency
ROCE
-3.0%
Weak
Low return on total capital employed
Debt/Equity
0.36x
Low
Conservative leverage
Revenue Growth (YoY)
14.4%
Healthy
Healthy top-line growth
Profit Growth (YoY)
-906.8%
Falling
Profits are shrinking
Dividend Yield
1.73%
Modest
Small cash return — most of the return has to come from the price
Free Cash Flow
₹64 Cr
Cash generative
Generates cash even after funding its capex
More Metrics
P/E (Forward)
20.3x
Operating Margin
5.1%
Average
Average margins
Net Margin
-14.3%
Weak
Very little revenue reaches the bottom line
Current Ratio
1.07
Adequate
Adequate, but no real cushion
Beta (vs Nifty)
0.61
Defensive
Steadier than the market
52W Range Position
16%
Mid-range
Mid-range
Technical Snapshot
SMA 20 / SMA 50
634.3 / 645.0
Bearish alignment (short < long)
Price vs SMA 200
Below
Long-term downtrend
RSI (14)
46.0
Neutral momentum
Financial Trend (4-Year)
Metric
FY23
FY24
FY25
FY26
3Y CAGR
Revenue
₹16,680 Cr
₹15,302 Cr
₹14,775 Cr
₹14,397 Cr
-4.8%
EBITDA
₹3,922 Cr
₹3,072 Cr
₹2,188 Cr
₹300 Cr
-57.6%
EBITDA Margin
23.5%
20.1%
14.8%
2.1%
—
PAT (Net Profit)
₹2,317 Cr
₹268 Cr
₹235 Cr
-₹1,896 Cr
—
EPS
₹90.95
₹10.52
₹9.23
₹-74.42
—
ROE
11.7%
1.2%
1.1%
-8.9%
—
ROCE
10.2%
4.1%
3.1%
-3.0%
—
Total Debt
₹6,296 Cr
₹5,563 Cr
₹7,072 Cr
₹8,001 Cr
+8.3%
Free Cash Flow
₹1,393 Cr
₹1,182 Cr
-₹244 Cr
₹64 Cr
-64.2%
🔴 Revenue has shrunk at 4.8% a year over 3 years.
🔴 EBITDA has shrunk at 57.6% a year over 3 years.
🔴 EBITDA Margin has fallen from 23.5% to 2.1% over 3 years (-21.4 pts).
🔴 PAT (Net Profit) has turned negative, from ₹2,317 Cr to -₹1,896 Cr.
🔴 EPS has turned negative, from ₹90.95 to ₹-74.42.
🔴 ROE has fallen from 11.7% to -8.9% over 3 years (-20.7 pts).
🔴 ROCE has fallen from 10.2% to -3.0% over 3 years (-13.1 pts).
🔴 Total Debt has grown at 8.3% a year over 3 years.
🔴 Free Cash Flow has shrunk at 64.2% a year over 3 years.
Poor scores on business quality without a price low enough to compensate. There is no obvious argument for owning this over a stronger company at a similar valuation. 3 high-severity red flags sit above this conclusion and should be read first.
3 of 5 tripwires tripped — Debt / EBITDA falls below 3x; Interest cover stays above 3x; ROCE stays above 8% · see Key things to watch ↑
