Tata Chemicals shares fall 2%, know the reason in details

Tata Chemicals encountered a setback on June 7 as its subsidiary, Tata Chemicals Europe, was fined £1.1 million by the Chester Crown Court in the United Kingdom. The fine stems from a safety incident dating back to 2016, which resulted in the injury and subsequent death of a contractor.

In response to this development, Tata Chemicals’ shares witnessed a decline of over 4 percent in trading. As of 12:27 pm, the shares were trading 1.91% lower at ₹1,043.00 on the NSE.

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Apart from this legal issue, Tata Chemicals has been grappling with challenges in the global chemical industry. Factors such as an influx of Chinese inventory, price pressures, and weakened global demand have adversely impacted earnings and margins across the sector.

Furthermore, Tata Chemicals has faced a subdued near-term growth outlook, leading to a decline of over 20 percent in its shares over the past three months. In the January-March quarter of FY24, the company reported a net loss of Rs 841 crore, compared to a net profit of Rs 692 crore in the same period last year. Additionally, revenue plummeted by 21.1 percent to Rs 3,475 crore from Rs 4,407 crore year-on-year, reflecting the ongoing challenges in the global soda ash industry.

The recent legal fine and the broader industry headwinds underscore the hurdles facing Tata Chemicals as it navigates through a challenging business environment.