Tata Chemicals Ltd

Dear Shareholders,

I hope you and your families are safe and well and I thank you all for your enduring trust in Tata Chemicals.

In retrospect, FY 2023-24 was a year of continuing challenges, due to geopolitical conflict in Europe and heightened tensions in Middle East, coupled with high energy and commodity prices which did moderate from their peak. Despite above challenges, India continues to be amongst the fastest growing economies in FY 2023-24.

While Tata Chemicals benefited from the sustained positive soda ash market dynamics in India, US and China, the conditions in Europe worsened where demand fell sharply by about 15%. This sharp erosion of margins in Europe resulted in impairment of mainly the soda ash assets of the Company in the UK. The pressure on margin in Europe spread across to all the regions and the full impact was visible in the second half of FY 2023-24. As a result, we delivered muted performance compared to FY 2022-23, with the Company achieving consolidated revenue of Rs 15,421 crore, a decrease of 8% over FY 2022-23, EBITDA of Rs 2,847 crore, a decrease of 26% over FY 2022-23. On the positive side, the team managed to improve cash from operations by 2% by better working capital management.

The Basic Chemistry segment declined by 7% in FY 2023-24 mainly impacted by lower sales volume of soda ash by 6% coupled with the reduction in realisation by 1%. Demand for edible Salt and Bicarbonate were relatively stable. The Company added 3.3lakhMTcapacityofedibleSaltandachieved highest ever edible Salt sale of 16.5 lakh MT in FY 2023-24. Bicarbonate continues to show resilient performance with its wide applications in food, feed, pharmaceuticals and industrial applications. Bicarbonate in India continues to grow, and the Company is investing additional capacities. The Company's UK business is also focussed on pharma grade Salt and Sodium Bicarbonate having higher value capture.

The revenue of Specialty Products segment comprising Agrochemicals, Specialty Silica and Prebiotics declined by 12%. Rallis India Limited, the Company's listed subsidiary operating in agrochemicals sector reported operating revenue drop of 11 % at Rs 2,648 crore, due to the sluggish agrochemical market conditions. Rallis continues its focus of becoming partner of choice to Indian farmers. The silica market in India saw stable demand for the year FY 2023-24. The Company is focussed on consolidating its position in the targeted tyre segment with its differentiated product portfolio. Conversion of production line to tyre grade silica caused drop in volume, however, value realisation was higher as compared to FY 2022-23. Prebiotics (FOS) sales is gradually picking up and product is well received by key food, feed and pharma companies; however, there is a challenge of long approval cycles. The Company is committed to invest and scale specialty products business to deliver sustained growth.

The Company is focussed on driving operational excellence to improve its resilience to address market cyclicality. We are leveraging revenue and cost synergies of our multi geographic presence by providing higher value and services to our global and key customers and minimising cost curves through efficient resource allocation. We are investing in digital transition to standardise business processes to improve operating efficiencies and costs.

The global chemical industry is undergoing transformation driven by sustainability forces. For Tata Chemicals, sustainability is the core of strategy. Our vision is aligned to Project Aalingana, Tata Group's flagship endeavour for greener, sustainable and eguitable future for the planet. Our core portfolio of Soda Ash, Bicarbonate are relevant for sustainable applications such as solar glass, lithium processing, biodegradable packaging and industrial flue gas treatment. Our prebiotic portfolio based on fermentation technology uses renewable bio-feedstock. We are investing in setting up Rice Plusk based Silica which will support greening the automotive tyres.

The outlook for the Company's portfolio is expected to remain stable in FY 2024-25 and medium-term prospects remain positive. Demand for Soda Ash will see recovery mainly in China, India and the Americas. Specialty Chemicals will continue growth momentum linked to India demand. We will commission additional soda ash, bicarbonate and silica capacities in India and pharma grade salt in UK in Ell FY 2024-25.

On behalf of Tata Chemicals, I thank you all for your continued support in our ongoing journey of transformation to deliver chemistry of sustainable growth.