The stable outlook reflects Moody's view that TCL will sustain revenue growth across all its businesses while maintaining its leading position in the global soda ash industry
Mumbai: Moody's Investors Service has affirmed the Ba1 corporate family rating of Tata Chemicals Ltd (TCL), while maintaining a stable outlook.
"The rating affirmation reflects the likely recovery in TCL's consolidated revenue and profitability from the trough during the pandemic fallout in the fiscal year ending March 2021," said Kaustubh Chaubal, Moody's vice-president and senior credit officer.
Moody's expects the recovery to sustain over the upcoming 12 to 18 months, strengthening TCL's debt/EBITDA leverage to comfortably below 4.5x and EBITA margin towards 20%.
TCL manufactures soda ash and related chemicals, including sodium bicarbonate, caustic soda, and bromides.
The stable outlook reflects Moody's view that TCL will sustain revenue growth across all its businesses while maintaining its leading position in the 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 that it will prudently deploy its cash surplus in new EBITDA-accretive investments.
Moody's said that TCL's rating continues to reflect the company's leading position in the global soda ash markets and its competitive cost structure. This underpins its sustained strong profitability, which will lead to better leverage and coverage metrics. TCL's very good liquidity is also an underlying strength.
The rating also reflects TCL's relatively small scale when compared with that of its global chemical industry peers, as well as its exposure to the inherent cyclicality in end-user markets.