Tata Chemicals vs Craftsman Automation Q4 FY26

TA

Tata Chemicals

Q4 FY26 · Manufacturing

Tata Chemicals reported a weak Q4 FY26 with consolidated revenue down 2% YoY to ₹3,438 crore and EBITDA falling 16% to ₹274 crore, reflecting subdued soda ash prices globally and higher costs. The US business took a ₹1,837 crore goodwill impairment due to prolonged pricing pressure. Standalone revenue grew 3% to ₹1,254 crore on higher volumes, but EBITDA margin contracted. Management highlighted that Middle East conflict has driven up energy and shipping costs, though most cost increases have been passed on. Imports into India have halved, supporting domestic volumes. Capex for FY27 is guided at ₹1,300 crore, mainly maintenance, with debt expected to stay near ₹6,000 crore. The company is pivoting to non-soda ash businesses (up 14% YoY to ₹6,946 crore). Key risk: prolonged conflict could erode demand and further pressure margins.

Guidance read

FY27 capex of ₹1,300 crore: Capital expenditure for FY27 is guided at approximately ₹1,300 crore, primarily for maintenance and some growth projects in salt, silica, and Singapore. Debt to remain at similar levels: Net debt (ex leases) is expected to remain around ₹5,961 crore in FY27, similar to FY26 levels, due to ongoing business pressures. Non-soda ash revenue growth focus: Management reiterated focus on growing non-soda ash revenue, which grew 14% in FY26, as a strategic priority to improve margins.

Risk read

Key risks include Kenya HFO supply disruption — Kenyan unit depends on HFO from Middle East; only 40 days of supply available. Alternate sourcing is being worked on but availability risk is high.; Ammonia supply restriction in India — Government advised fertilizer units not to supply ammonia to non-fertilizer users. Tata Chemicals uses small quantities; supply is adequate for now but could become constrained.; Prolonged Middle East conflict could erode demand — While no demand erosion seen yet, a prolonged conflict could begin to weigh on demand, especially if customers face pressure.; Chinese inventory overhang — Chinese soda ash inventories remain high at 1.5-1.8 million tons, keeping global prices rangebound and limiting upside..

Promise ledger

Scorecard data is being built as historical quarters are processed.

Craftsman Automation reported a mixed Q4 FY26. The powertrain segment saw margin improvement due to reduced repair maintenance and better product mix, but overall capacity utilization remains at 60-70%. The alloy wheel business exited March at an annualized run rate of 3 million wheels, with revenue of ~₹280 crore for FY26. The Sunbeam restructuring is ongoing, with management exiting unprofitable customers and products, expecting margin traction from Q2 FY27. Management guided for mid-teens revenue growth in FY27, driven by new projects across segments. The large engine powertrain business is on track to reach $100 million revenue by FY29-30. Key risks include inflationary manpower costs, inability to pass on commodity price increases, and potential import competition in alloy wheels.

Guidance read

Mid-teens revenue growth in FY27: Management expects double-digit revenue growth, specifically mid-teens, for FY27, assuming stable aluminium prices. Net debt to EBITDA below 2x in FY27: Management targets net debt to EBITDA to fall below 2x in the current fiscal year, and further to 1.5x. Sunbeam margin improvement from Q2 FY27: Restructuring of Sunbeam (exiting unprofitable customers/products) is expected to show margin traction from Q2 FY27. Large engine powertrain $100M revenue by FY29-30: The large engine powertrain business is on track to reach $100 million in revenue by FY29-30, with phase two expansion decision by September 2026.

Risk read

Key risks include Inflationary manpower costs — Management highlighted that labor cost inflation (20% YoY) is a major concern, difficult to pass on to customers, and could pressure margins.; Aluminium price pass-through and import competition — Analyst raised concerns about alloy wheel imports and commodity price pass-through; management acknowledged the risk and is cautious on further capacity expansion.; Sunbeam restructuring execution risk — Sunbeam's margin improvement depends on successful exit of unprofitable business and customer renegotiations; capacity utilization may temporarily drop to 45-50%.; High capex and debt levels — Despite management's confidence, net debt of ~₹3,300 crore and ongoing capex (land acquisition, new plants) could delay deleveraging if growth slows..

Promise ledger

Scorecard data is being built as historical quarters are processed.