Evening, ladies and gentlemen, and welcome to the Q4 FY 2025 and FY 2025 earnings conference call of Tata Chemicals Limited. Please note that this conference is being recorded. As a reminder, all participant lines will be in the listen-only mode, and there will be no opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star then zero on your touch-tone phone. We have with us today Mr. R. Mukundan, Managing Director and CEO, and Mr. Nandakumar Tirumalai, Chief Financial Officer of Tata Chemicals Limited. Before we begin, I would like to mention that some of the statements made in today's discussion may be forward-looking in nature and may involve risks and uncertainties. With this, I now invite Mr. R. Mukundan to begin the proceedings of the call. Thank you, and over to you, sir.
Thanks, Neerav. Good evening and welcome to everyone for this Q4 FY 2025 earnings call. I'll start the discussion with a brief industry overview, then move on to our highlights across business and geographies. Starting with the demand scenario across geographies, the demand worldwide, there was a surge, there was a growth, mainly led by China by 18% and India by 4.5%. The market conditions, while the rest of the world saw a very mutual growth or decrease in demand of about 2.3%, the market conditions remain challenging even as India continues to grow, while China, U.S., and Western Europe are either seeing flattish or slight decline due to reduced demand, mainly in the flat and container glass in all these markets. Going forward, we do anticipate that a pocket beyond, other than China, U.S., and Western Europe, to show momentum and growth, and India will continue to grow.
Though demand-supply balance softness, tariff uncertainties will also weigh in on the markets. However, I would say looking beyond this, medium and long term remains positive, driven largely by sustainability trends where soda ash is one of the key ingredients for the sustainability transition of the world. In terms of supply side, soda ash remains well supplied, and mainly the supply position will continue to remain strong, especially because supply has risen in China more recently. Soda ash capacity increased by 8.9%, and this was the main reason for a decline in prices by over 25% from previous year. The tariff uncertainty could lead to shifts in production center of soda ash application industry, and this could lead to change in demand centers. However, some of the demand centers will continue to move forward with positive momentum.
In terms of the TCL performance, the company reported for Q4 a consolidated basis, a revenue of INR 3,509 crore, EBITDA of INR 327 crore, and a PAT before exceptional item of -INR 12 crore. For Q4 financial year on a standalone basis, on a revenue of INR 1,219 crore, there was an EBITDA of INR 230 crore and a PAT from continuing operation of INR 97 crore. For the full year, the consolidated revenue was INR 14,087 crore, an EBITDA of INR 1,953 crore, and a PAT before exceptional item of INR 479 crore. Similarly, for FY 2025, the standalone revenue was INR 441 crore, EBITDA of INR 818 crore, and PAT from continuing operation of INR 524 crore. India, the performance is higher compared to previous and mainly driven by higher volume, partly offset by lower realization of soda ash and bicarb. The quarterly sales volume of FO has increased significantly to 870 metric tons compared to Q4 of FY 2024.
During the year FY 2025, company commissioned 230 kT of soda ash, which is fully on stream now, and 140 kT of bicarb capacity in Mithapur, which is also fully on stream. U.S. overall, both volumes and prices were lower than Q4 of 2024 in FY 2025. U.K. had lower volume mainly because of the key reason of decommissioning of the ceasing of the soda ash operations in Lostock, and there has been an exceptional charge, additional exceptional charge of INR 55 crores, which has been taken to comply with certain regulatory and contractual obligations in U.K. Our focus in U.K. will be to move fully to high-grade value-added products, and in this regard, we have commissioned 70 kilotons of pharma grade salt capacity in Middlewich, U.K.
Kenya saw higher sales volume and higher realization, mainly because they continue to focus on the domestic African market, which gives them better yield in terms of contribution margin. Rallis results were lower amidst continued weakness in export market, and this also is a weak quarter for Rallis, and they were in line with our internal understanding. In conclusion, going forward, I think our focus will continue to be focused on safety, focused on sustainability. While focusing on these two, we will continue to focus on maximizing volumes across products, focus on cost and working capital efficiency, and we'll also calibrate CapEx to the market conditions. We remain positive in terms of the medium-term outlook, and we also remain very, very focused on our outcomes in the immediate term to ensure that our free cash flow and operational efficiencies continue to be at the highest order.
With this, I close my comments and hand over back to the moderator to open for Q&A. Thank you.
Shall we open up for questions?
Q&A.
Q&A.
Thank you very much. We'll now begin with the question-and- answer session. Anyone who wishes to ask a question may press star and one on the touchscreen telephone. If you wish to remove yourself from the question queue, you may press star and two again. Participants are requested to use handpads while asking a question. Participants are requested to limit their questions to two or four participants and can rejoin the queue in case of further questions. Ladies and gentlemen, we will wait for a moment while the question queue assembles. First question is from line of Saurabh Jain from HSBC. Please go ahead.
Yeah, thank you so much for the opportunity. My first question is on the Indian business. We have seen improvement in the volumes and also on the margin side on a Q&Q basis. I wanted to know your views whether the government-imposed minimum import price, does it play a role in this kind of improved performance for us during the quarter?
No, I think this would have been done even without any support, and I think that MIP was, in fact, not a factor at all.
Okay, so it's going to expire in June, and how would you imagine the situation in India post this MIP expiry? You said you are not impacted, right? What about the industry? Are you seeing any impact post this expiry of MIP next month?
I doubt it benefited industry. I doubt it's going to sort of impact the industry.
Okay, thanks. Secondly, on the U.S. business, and if you can also comment on the margins for the other businesses as well. The U.S. business, we are seeing the margin kind of seeing persistent compression, right? While if I look at the realizations, it's still holding up at about $259-$260, and we used to make good margins at these realizations about two to three quarters back. Can you please explain what kind of led to such kind of difficulties in getting the profitability in these resources?
I think the big issue in the U.S. is not the mainly the domestic piece of the U.S. business is doing fine in terms of both revenue and margin profile. It is mainly in the exports where there's been a margin compression, and I think fundamentally one needs to watch out for the export pricing in the Southeast Asian market and in the Latin American market. Latin American market, not such a big issue, being the Southeast Asian market where the prices are hovering somewhere close to, I would say, $200 per ton, and they are not while they have positive contribution margins, but they are not full cost.
What you're alerting to the fact is that the demand situation is much better in the Latin and the Southeast Asian markets, but the pricing challenges remain.
Yeah, I think.
I don't think there's a demand issue in the market we operate. I think we are fully sold out, and we'll continue to be fully sold out in all our products. I think as far as, and I think the way we do see the next year going forward, we do see India, Kenya, and the U.K. continue to move in the positive direction. U.K. mainly because they've restructured their operation, and I think the cost structures and everything will be reflected by first quarter, and you would start seeing the difference. By second quarter, it would have fully settled down. I think that's the profile I would say of U.K. because whatever residual issues would be there, they would all be out of the way during, I think, early part of this month itself, more or less it was out of the way.
I think we are not going to see any further cost impact, and U.K. would continue to go towards a value-added cost profile, which is what India would continue to move in the same direction, and Kenya would be. U.S. domestic also should be positive. I think the main point being the U.S. exports, which we remain totally focused on how to improve the volume and the market mix, and that effort the team is going to work on. It is not that we can't place the volume, but it is about where can we place the volume with opportunities to improve the margin profile.
What could be a fair assumption to kind of build out the margin for the U.S. business? $40 per ton of margin, when can we reach that back?
What are the questions?
What I'm saying is what kind of improvement do you expect in the US margins in the next few quarters? How much of that can improve?
I think the quarters, the pricing is still subdued in the market here, so I think we have to look. And since US exports are about 60% and proceeds domestic sales on the export part, the pressure still remains. So we do not expect any major improvement in the margins the next few quarters anyway.
Thank you. Before the question tracking, I am requested to come back for a follow-up question.
Sure.
Thank you. I request all the participants kindly reflect two questions for participants and join the queue again for a follow-up question. Next question is from line of Ankur Periwal from Axis Capital. Please go ahead.
Yeah, hi, and thanks for the opportunity. I hope I'm audible.
Yes, you are audible. Please go ahead.
Yeah, great. Thank you. First question on the U.K. part of the business. You did mention one-time cost or expenses of around INR 55 crore for the quarter. Even if I adjust for that, the profitability on the business, given the shutdown of Lostock there, looks slightly on the lower end. Your thoughts on how you are looking at FY 2026, given that pharma grade salt also comes into picture in terms of hamper, and the loss-making operations are also taken care of?
Yeah, I think as I said, by quarter two, you would start getting the complete stable profile, and our anticipation is in terms of its overall, it should move towards the way Lostock transformed itself. I think U.K. is on a transformation path. We are pretty much hopeful that that will be the direction it would take.
Sure. Just as a follow-up, any numbers or thoughts we can peg ourselves to, maybe an FY 2021, 2022 profitability, sort of a number that we can look at on a steady state basis?
I think we look at the British Salt numbers have improved in the last three, four years' time, and therefore when we get the annual report, I think by the end of May, you'll get all the numbers for company-wide performance, and then you can look at those and work out. British Salt is an upside, and it's a bit dire. The last four years, anyway, doubled. That will remain. At the time, we also get the incremental volume from the pharma-grade salt and salt, and bicarb, the 80 kT plant remains in the U.K., which is going to deliver profits. Lostock is shut down, so Lostock losses will not be coming going forward. Broadly, we're looking at a kind of U.K. getting into a much better financial position going forward. The issue remains debt in the U.K., which has to get serviced over a point in time.
I think broadly, it's British Salt and the 80 kT backup, which will do well.
Okay, great. That's helpful. Second, on the Kenya side of operations, we have seen a recovery in profitability there. Volumes also have seen a Q1, Q2 improvement as well as on a year-on-year front. Will this be a fair run rate expected to continue, or are there more benefits that can flow through there?
Yeah, in Kenya, I think this would continue. I think there is headroom to improve volume even further. That will be our attempt, but I think the current run rate is a fairly conservative estimate you can make. In addition to that, they've got an approval to expand their capacity from the government. NEMA approval has come this quarter, and they are pressing ahead with the expansion initially by another 50,000 tons. This 50,000 tons will be a pure ash product, which means it can go into float glass, and we expect to bring it on stream sometime towards the end of the year. That will be another added benefit as we move forward in Kenya. The pure ash product, at least the construct we have, it will come in streams of 50,000 tons because it is a very modular plant which uses green power and solar power.
Thank you.
Okay, great. That's helpful. Thank you and all the best.
Thank you. Next question is from line of Rohit Nagraj from B&K Securities. Please go ahead.
Yeah, thanks for the opportunity. First question is in terms of the Chinese demand. We have seen that last year also it went up by double digits. For three months also, in the coming two years, it's almost 18%. Any understanding as to which segments are driving this demand? Probably at a certain point in time, there could be a backlash in terms of the user segment, there would be higher inventories, and subsequently, demand slowdown for soda just should have come in from there. Thank you.
As I mentioned, last year was a year of very strong growth in China. We do not expect similar growth to continue this year. Last year was about 18% surged by mainly solar and lithium carbonate markets. We do not expect because usually we expect about 6% growth. We are actually factoring in that China will probably remain stable or maybe have a negative of 1% or so. It is going to be somewhere stable in my view. That is what we are projecting into our plan.
Sure. Thank you. Also, second question in terms of the India domestic market, how are we sourcing both the availability of soda ash in the domestic market and the exports? Concurrent demand side, which in all segments are actually showing good traction? Thank you.
India will continue to grow, and we are seeing very good traction of growth in both glass and all other segments in India. We are at least factoring anywhere between 5%-6% growth in India even in the coming year. The Indian economy and Indian demand is one of the steadiest we will see for the next couple of years.
Yeah, thanks and all the best.
Thank you. Next question is from line of Ramish from Nirmal Bang. Please go ahead.
Thank you and good evening. If you were to look at the U.K. business in perspective, if you were to knock out the soda revenues and work on the margins, is a 20% kind of margin possible once everything stabilized by maybe second half? What is your thought on that?
I think my suggestion is once we stabilize, I said that the second quarter is what you should take. First quarter, I think, will be the continued process stabilization. The reason I say that is we will be finishing the reconfiguration of our power plant and other plants because these power plants are sized for a very large capacity of soda. They are being reworked and reconfigured. That work should sort of stabilize around second quarter. I would say I do not want to make any forward-looking statement. I think we need to wait for the second quarter numbers to come through. Part of the result you will see in the first quarter itself. By the time second quarter comes, it should stabilize more.
Okay. In terms of the US business and the overall interest expense outlook in terms of the cash flows, when do you see the cash flows improving to levels where you can reduce the debt and bring down interest expense? Obviously, you need to see some traction in terms of the pricing. At these prices, would you expect the current run rate in the US profitability to continue, or do you have any other levers where you can actually marginally improve the performance?
In terms of U.S., our focus is going to be to generate enough EBITDA margin and cash flows to at least start bringing down the debt marginally. We are extremely focused, and we have actually tightened our belts in terms of, when I said recalibrate the CapEx plan, I think the bulk of the recalibration in CapEx is happening in U.S. as we speak. We will be able to grow the momentum in U.S. as soon as we see that it has reached reasonable levels of free cash flows, which then can allow us to invest. We are putting capital where the cash flows are good, and where the cash flows need to improve, we will work on improving them. One of the big levers we have is to become even more cost-efficient and cost-competitive, and that effort is underway during the year.
You'll start seeing some of the results on that. Even while the market remains challenging for the U.S. exports, you will start seeing the results during the course of the year.
One last thought. If you look at the excess capacity plaguing the market, what is the kind of capacity that needs to be taken on for you to get back to normal age margin?
See, the excess capacity, I would say not excess capacity, excess uncompetitive capacity, I think, which needs to go off for the balance to happen. I think if you look at the world prices, the highest world prices in Western Europe, I think the capacities there are being serviced at unsustainable levels. Ideally, they would be the ones. Also, in these sort of markets, we expect the new CapEx for synthetic to sort of slow down, and that will also make sure that as growth comes in, demand growth continues, we have a reasonable balance coming through. Broadly, I would say that in the market we operate now, we are not an operator in the European market. For us, we work with a pretty stable outlook towards capacity and continued growth of the market.
The balancing in Europe will only take out some of the material which needs to, which flows out from Turkey into Europe, which will continue to increase. That's our view.
Okay. Thank you very much, and I'll join the queue.
Thank you. Next question is from line of Vivek Rajamani from Morgan Stanley. Please go ahead.
Thanks.
Hi, sir. Am I audible?
Yep.
Yeah. Thank you so much for the presentation, sir. Just a couple of clarifications on the U.S. I know you mentioned that the export realizations in some markets were the main reason for the decline in EBITDA, but I just wanted to check if the surge in gas costs that we saw this quarter, did that also play a role in the margin compression? The second clarification I had was, if I remember correctly, in the last quarter, you mentioned that two shipments got pushed out to this quarter. I just wanted to check if it was not for those shipments, would the U.S. volume numbers have been lower this quarter? Thank you.
Yeah. I think the U.S. volume numbers are lower this quarter, mainly because I think we had congestion at the port of Portland because of weather conditions, and they did get pushed out. They will come into the books in the first quarter of the current financial year. In terms of your question about—sorry, can you repeat the first question? What did you ask before that?
Yeah. I just wanted to check if the increase in gas costs, did that also play a bit of a role in the margin compression?
See, gas is fully hedged. I think our big issue, more than the cost side in most of the unit variable cost side, it has more been the market pricing and also fixed costs where there are opportunities. I think we are focused on those two elements. U.S., in fact, our gas consumption is only 25% of our energy portfolio there. 75% of our energy portfolio still is coal, and while we will convert to gas fully by 2030, as we speak, 70% is coal, which is more or less stable. There is no movement in the cost at all. For us, the impact is not high, and that has not made any difference. Our biggest difference is, as Nandu highlighted, we need to maximize volume. Maximizing volume does bring down variable costs because the utilization rates aid efficiencies of operation.
The second piece is about making sure our fixed cost is fit for fitness. There are opportunities there. Also, markets we serve, can we get to slightly better servicing of markets where the profile market mix is better?
Sure, sir. Just as an extension to that, because you mentioned the logistical problem, would a 600 kilotons sort of a quarterly run rate be a realistic number to assume going forward, assuming you do not have any other constraints?
For U.S.? Yeah, yeah. It should be very—sorry, it should be very much possible. I think we are also in the process of adding warehouse capacity so that the production rates and evacuation rates do not get affected. We will be doing that to aid a steady production, but 600 on an average would be very comfortable.
Sure, sir. If I could just squeeze in one last clarification. I think in your opening remarks, did you mention that there was supply growth in China once again? Did I hear that correctly?
Yes. In China, there's been a supply growth. I think that is where the capacities have come in last year. I think the Inner Mongolia capacity was not running at full rate, full capacity due to maintenance outage, but now it is fully back on stream. The maintenance.
Apart from the Inner Mongolia capacity, sir, there is nothing incrementally new, right? It's just a ramp-up of that capacity. Is that correct?
Yeah. Basically, they're out of their maintenance outages, which is why I think the exports to China stopped.
Good. I just wanted to clarify that. Thank you so much, and all the very best.
Thank you. I request all the participants kindly restrict to two questions and join the queue for a follow-up. Next question is from line of Arjun Khanna from Kotak Mahindra. Please go ahead.
Thank you for taking my question. Sir, when I look at our net debt, it's up roughly INR 1,100 crore. In the presentation, we talk about net debt being higher due to higher working capital debt in India, U.S., and U.K. When I look at our balance sheet, I do see inventories up only INR 30 crore, trade receivables being flat at INR 1,900 crore, and trade payables actually in our favor of around INR 120 crore. What am I missing here?
Arjun, I think it's more in terms of the—we also had a CapEx incurred during the quarter. I think temporary funding for the year for CapEx. This year, we had, I think, peak CapEx in India and all over the place. That is a temporary working capital loan taken to fund the CapEx. Over a period of time, that it got to be repaid from our equity coming in terms of the profit being made. Otherwise, the inventory is more or less intact. It's more like the—I would say the U.K. had also certain expenses, the variable cost being more. Otherwise, it's more in terms of funding the overall cash needs of the company, which came in the year. EBITDA was there, but it was offset hugely by the CapEx incurred.
The last stage, because this CapEx was mainly incurred for the last stage of Mithapur, which had the capitalization happening for soda, bicarb, and salt. It is a matter of temporary funding taken through working capital took.
In terms of CapEx, so we spent roughly INR 2,000 crore in FY 2025. What is the outlook for FY 2026 and beyond if we have any number for 2027?
It will be lower because this year was a peak, Arjun. We actually spoke about the U.K. pharma grade salt was capitalized the current year, the salt and bicarb came. This is a peak. We will go back to the historical trends going forward, at least for next year.
Our plan would be about INR 1,000 crore for FY 2026?
See, our sustenance CapEx should be clocking anywhere between INR 550 crore or so, INR 550 crore-600 crore or so. Beyond that, I think our biggest CapEx is the increasing capacity in silica plants. Sorry, our epoxide prebiotics plants at the cost of about INR 18 crore. There are no other major CapExs being planned during the year. We'll come back to you when we.
For Kenya as well?
Kenya is a very.
50,000?
Yeah, that is at a very minor CapEx. We'll give you the figure in the next meet when we do. It is about Kenya is about next year is about INR 60 crore.
For 50,000 tons?
Yeah. 50,000 and other capital expenditures.
Sure. My final question, second question on freight costs. If I see freight and forwarding costs year on year, while we have increased volumes by roughly 1% odd, we see an 11% increase in freight and forwarding charges. Is there any one-time impact on this, or is there anything you'd like to call out on this number?
Arjun, is it.
Change, etc., the way we do business?
Yeah. Yeah. One is increased volume we had in the current year, Arjun. Secondly, we look at the increase also this year. We are getting a lot of ANZAC in the last year of ANZAC, which means that now we have to directly get the CNF price and pay the freight for it. Till last year, we had ANZAC a much higher share. They were delivering at the airport in the U.S., and they were incurring the freight. The model has changed in the U.S., and this is the third year and the last year of ANZAC coming out. Next year would be entirely export without any ANZAC play. That is a changing model, which means now we get a higher revenue, but we also incur higher freight.
Sure. See, it's a positive impact on margins?
See, that we can't say. Between ANZAC and export, both would be more or less similar. In the non-ANZAC case, we'll get ready to know who the customers are. At this point in time, I think it's premature to comment on whether I'll get better margins by doing non-ANZAC trade. Broadly, it should help us in the long term. Now we know exactly who the customers are, and we can service them better.
Sure. Thank you very much for this and wishing you all the best.
Thank you, Arjun.
Thank you. Next question is from line of Abhijit Akella from Kotak Securities. Please go ahead.
Yeah. Good evening, gentlemen. Thank you so much for taking my question. Sir, in your opening remarks, I believe I heard a number of 8.9% increase in capacity for soda ash for the full year last year at the global level. Just wanted to confirm that number. If you could please also just help us with a demand growth number if you would happen to have that for last calendar year as well.
Last calendar year, I think both were about similar, I think 8.3 and 8.9. I think the demand grew by 8.3%, and the supply which came on stream was 8.9%.
Understood. With regard to the outlook for capacities in the global market, would it be possible to share your perspective on how you're seeing things? There is a large capacity expansion by Sisecam, I believe it's called, in the US, 5 million tons odd, and then some other smaller expansions in various parts of the world. Any sense of how much new capacity could be expected over the next two or three years?
How we would get expansion in US for export market is unviable at this price.
Yeah. That's.
I'm saying that at the current export price realization and margin, the expansion of capacity is not viable. The point is that at the end of the day, you're going to finance these. It won't be, numbers don't add up.
Understood, sir. As for your market intelligence, are the suppliers in the market behaving rationally according to this, or are the expansions still going on as per their plans?
I cannot comment on that. I can only comment on what we do. I think if you look at the market picture, it has become even more slightly hazy with all the tariff issues. On top of that, interest rates are not coming down with the rate at which they need to come down. I think if it is going to be deep bottlenecking where you are adding capacity for very marginal cost, I think it is one scenario. If it is a scenario of a fresh new capacity, I think it is challenging.
Okay. Thank you so much and all the best.
Thank you. Next question is from line of Dishant Gupta from GEOJIT Financial. Please go ahead.
Good evening, sir. My first question would be, what exactly would you attribute the lower profitability to? Is it because of drop in realizations or increases in expenses or issues in the U.K.? What exactly would be the reason?
Clearly, I think pricing has a role. Secondly, I think this quarter, some of the units could not perform in terms of volume, especially the U.S. Thirdly, I think the issue is also due to certain one-off expenses which have been booked in this quarter.
Okay. My another question would be, if the sales volume growth has not been very promising, how will you maintain the sales volume growth in the future to offset the lower realizations or the volatility in the realization in the future?
I think we will continue to maximize throughput. I think in terms of sales volume, if you look at it, I think the volume loss which we will have in the U.K. in soda ash more or less will try to compensate with growth in India and Kenya. India and Kenya will continue to offer opportunities for expansion.
Okay. Will you be able to give me a number, like how much sales volume growth would you expect year on year on a sustained basis?
See, the capacity has gone up in the current year, as is the numbers have been given to you. That will come for the next year, full year. This is only part of the year it came. You can expect that for the full year next year, both India soda ash, India bicarb, and U.K. pharma grade salt. That will be the incremental volume next year.
That capacity increase would be, according to you, it is met by the demand, right? The demand growth also would be expected as much, right?
Yes.
Okay, okay. Thank you. Thank you so much.
Thank you.
Thank you. Participants, kindly restrict to two questions per participant. Next question is from line of Saket Kapoor from Kapoor & Company. Please go ahead.
Yeah. Namaskar, sir. And thank you for this opportunity. Sir, firstly, can you provide us with the import number in tonne for the quarter and for the year as a whole? As you mentioned that MIP did not play any role. Post the imposition of MIP, how have things been? Also, an update on ADD details.
There has been a reduction, but my view is that, and I'm giving my company view, that MIP number is not impacting. It's about 1 million ton of material that came into India. But I think ADD, I think the investigation is on, so it is on. I would not like to comment on a matter which is in a quasi-judicial process.
Okay. Sir, for the utilization levels, what are the current utilization levels, and what are the capacity additions for both soda ash, bicarb, and salt? If you could just give some colors for the next financial year, how are the capacities likely to be set?
See, our numbers we have with you in terms of Tata Chemicals that is there. Beyond that, capacity expansion is almost looked at US is unviable. We do not look at much expansion coming on board, excepting China which is already at Inner Mongolia as fully operational. Otherwise, we do not expect at the current prices that companies can put up capacities which will be viable.
That's correct. I think the INR 2,000 crore CapEx which we have spoken for this financial year.
Yeah. I know you're asking about our capacity. Our capacity, as Nandu has already mentioned, 230,000 ton of soda ash and 140,000 ton of bicarb, that's fully come on stream. The full use, what you saw in quarter four, will be now seen in through the full year. That is upset.
Okay, sir. Right. I'll join the team. Thank you, sir.
Thank you.
Thank you. Next question is from line of S. Ramesh from Nirmal BMang. Please go ahead.
Thanks for the follow-up. If we were to achieve the full utilization of your expansion, Mithapur, soda ash, and bicarbonate, in terms of the depreciation run rate, would it be similar to what we saw in the fourth quarter for the full year, about INR 72 crores, or should we pencil in some increase there? On this sort of utilization, after the depreciation, would we be able to achieve the normal EBIT margin and ROC around 20%?
Ramesh, we capitalize sometime in October, so this Q4 would be the right number to track for the full year going forward, quarter-wise.
That entire 230,000, we can expect to be done in FY 2026?
Yes. And 145 kT bicarb.
Okay. So just some thoughts on the U.K. tariff rebates for Indian exports under the FTA. Any impact for soda ash, bicarbonate, or any other business?
From U.K., we bring in very high-quality pharmaceutical-grade products into India. Our exports to U.K. are not there, but I think certainly we are examining opportunities to export high-grade pharmaceutical products once we start making in India to them. As of now, we do not manufacture. We make the pharma grades only in U.K. It is an opportunity to manufacture in India.
Okay. Thank you very much. I'm just holding this.
Thank you.
Thank you. Next question is from line of Aditya from DB Security. Please go ahead.
Hi sir. Thank you very much for taking my question. I had a quick question based on your initial comments. You said the number of the volumes are increasing on the India front now and other regions, right? Would it be enough to compensate for the decline you're seeing in other regions?
Decline of what?
In the sense that your decline in terms of the prices, and your presentation says that some sort of a demand is tapering down in the U.S., Europe, and China as well, right?
Yeah. I think in the U.K., we do not sell soda ash anymore. I think it is mainly soda ash sold, which is bought from the U.S., which we sell to customers with whom we have contracts in the U.K. We do not manufacture soda ash. What I meant was the capacity which went out in the U.K. will get compensated during the course of the year by India and Kenya put together. India has already added 230. There is another 50,000 ton which is coming in Kenya. That should compensate for the loss of volume. We will be able to go back to our volume which existed when the U.K. used to operate fully soda ash. In terms of bicarbonate, there is a minor reduction in the U.K. of, I think, 40,000 ton, which we used to go to the fluoride treatment market.
Because in India, we've already added 140,000 ton, I think our net increase in bicarbonate will be 100,000 ton already. Salt, we have added 70,000 ton in the U.K. of the high-grade pharma salt. Our capacities in India are fully operational. There's further expansion coming on stream, which we will review during the course of the year and come back to you.
Just to follow up on that, would that compensate for any increase in the production on the India side, right? Will it help us sustain the EBITDA above the last year margin? Because it's now below 10%, right? And there has been a steady decline. I understand that the volumes are going up, but pricing pressure remains, right? If certain markets do well.
Correct. As it is, the pricing pressure remains. I think what we have done is we reconfigured our U.K. operation. That should be an upside next year. That should fix because our costs were high, and we were having negative margins there. That is no longer there. I mentioned that U.K. will transition to the same situation which we have in Kenya, which is a profitable unit. India would continue to. You have three units which will be clearly in the positive zone. U.S. exports remain a bit of a challenge, but we will work our way through that through ensuring cost and operational efficiencies. You could wait for the operational details as we move along quarter one and quarter two. That would give you an indicator of the way we are going to be transitioning into next year.
The last two quarters are not a reflection of what the company is planning to do next year.
Okay. Sir, would you like to give some guidance on where the EBITDA margin should look like for FY 2026?
We don't give guidance as it is, but I think that's what I mentioned. As the year unfolds, by quarter two, you will have a clear direction of where we are headed.
Okay. Okay. Just second last question, sir. With the tariffs coming along, right, do you see that because there is a clear pressure on China, do you see some of those export volumes might be given to us or can we basically take advantage of that in case if there is a sustained pressure on exports out of China?
I think in our view, we have not factored any of the major issues around tariff. It may lead to rebalancing of supply-demand centers. As of now, from the centers we manufacture, we have not seen a major shift in the way we need to rebalance our market portfolio. We will keep updating you every quarter because this is a fast-moving situation, and we cannot predict for the future. As we speak, our view is that our production center and market portfolio, we are not seeing any major shifts in the demand patterns as we see. If there is a substantial change, we will update you at the end of the first quarter.
Okay, sir. Thank you very much and all the best.
Thank you.
Thank you. Thank you very much. Ladies and gentlemen, we'll take that as a last question. I'll now like to hand the conference over to Mr. R. Mukundan for closing comments.
Thank you. Thank you for joining the call today to all the participants. While the market conditions remain challenging, our endeavor is to excel in operations through innovation, digital, and customer delight. We continue our journey to embed sustainability, guided by Project Aalingana , which the entire Tata Group is focused on. Our focus is to expand the core while being calibrated, and this will also include broadening the portfolio with high-grade and high-value added products. As highlighted in the previous call, market remains range-bound, and the pricing scenario would continue as it is, at least in the immediate term. We expect over a period of time, the market profile to change, and especially the positive benefits of sustainability as a driver will come into play. In terms of our approach, we would continue to focus on ensuring cost optimization and focusing on becoming more competitive.
We will also be looking at ways and means to improve our capital program, including working capital. We look forward to seeing all of you in quarter one of FY 2026. Thank you all, and safe days ahead. Thank you.
Thank you very much. On behalf of Tata Chemicals Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your line. Thank you.
Thank you.