Moody's affirms Tata Chemicals Ba1 rating with stable outlook
Jun 11, 2021
Singapore, June 11 : Moody's Investors Service on Friday affirmed the Ba1 corporate family rating of Tata Chemicals Ltd (TCL).
The rating outlook remains stable, it said.
"The rating affirmation reflects likely recovery in TCL's consolidated revenue and profitability from the trough during the pandemic fallout in fiscal year ending March 2021," said Kaustubh Chaubal, Moody's Vice President and Senior Credit Officer.
"We expect the recovery to sustain over upcoming 12 to 18 months, strengthening TCL's debt/EBITDA leverage to comfortably below 4.5x and EBITA margin towards 20 per cent," he said.
The stable outlook reflects Moody's view that TCL will sustain revenue growth across all its businesses while maintaining its leading position in global soda ash industry.
In addition, the stable outlook continues to reflect Moody's expectation that TCL will retain its measured approach to growth and will prudently deploy cash surplus in new EBITDA-accretive investments.
TCL's business profile is diversified across products and geographies. Basic chemical products (soda ash, sodium bicarbonate and salt) comprise 75 per cent of consolidated revenue while specialty products like agricultural chemicals account the balance quarter.
Through its various subsidiaries, TCL has manufacturing operations across India, the United States, the United Kingdom and Kenya.
Moody's said the company has very good liquidity. Cash and cash equivalents of 410 million dollars as of March and estimated cash flow from operations of 320 million dollars over the 18 months until September 2022 should cover TCL's capital expenditure and debt servicing needs.
