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Fitch affirms Tata Chemicals at 'BB+'; outlook stable

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Fitch Ratings has affirmed Tata Chemicals long-term foreign-currency issuer default rating (IDR) at 'BB+' and the outlook is stable.

Fitch Ratings said the rating reflects Tata Chemicals (TCL)'s globally leading and cost-competitive position in soda ash, geographic diversification, the soda-ash sector's adequate exposure to non-discretionary end-markets, and improving financial profile. The rating is constrained by TCL's small scale relative to global peers and lack of product diversification.

Fitch maintained a 'Stable Outlook' notwithstanding lower sales, which are likely to persist for six months, stemming from the coronavirus pandemic. Fitch said it believes weaker demand will be mitigated by lower energy costs, which should support a healthy margin, and that soda ash supply will remain largely stable over the long term.

Tata Chemicals is a global company with interests in businesses that focus on basic chemistry products, consumer and specialty products.

On a consolidated basis, the chemical company's net profit rose 6.5% to Rs 233.84 crore on a 2% rise in net sales to Rs 2620.38 crore in Q3 December 2019 over Q3 December 2018.

Shares of Tata Chemicals were down 4.43% at Rs 219.

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(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Mon, March 23 2020. 13:00 IST