Tata Chemicals Ltd

NSE:TATACHEM

Earnings Call Analysis

Tata Chemicals shows steady revenue growth amid operational challenges.

Tata Chemicals experienced a 6% sequential revenue increase in Q2 FY '25, impacted by adverse weather in India, which halted operations for ten days. The firm has stabilized its operations post-expansion and anticipates increased throughput in upcoming quarters. While U.S. demand remains robust, the U.K. operations face challenges with negative margins due to high energy costs. The company expects significant revenue growth in its silica segment, forecasting 500 crore INR from its expanded capacity within 2-3 years. Overall, the pricing is viewed as having bottomed out, positioning the company for further improvement in profitability.

Navigating Market Challenges and Opportunities

Tata Chemicals faced a mixed demand scenario in Q2 FY '25, with stable pricing across markets but variations in regional demand. In the U.S., container glass demand decreased, while Southern Europe experienced an uptick due to beverage exports. Conversely, stronger soda ash demand persisted in China until late September, before moderating. Increased imports from various countries into India and stable exports characterized the quarter, alongside a substantial uptick in U.S. exports.

Financial Performance Insights

The company reported a 6% sequential revenue increase, attributed mainly to higher volumes in the U.S. Delays in India's operations due to heavy rains, impacting productivity by around 70,000 tons of soda ash and salt, resulted in lower volumes. Despite these setbacks, the management expects operational stabilizations from Q3 FY '25, coinciding with the commissioning of expanded capacities, including soda ash and bicarbonate plants.

Cost Implications and Recovery Expectations

Heavy rainfall and operational instability resulted in increased costs, estimated at INR 40 crores, with INR 25 crores due to unstable operations and INR 15 crores related to insurance claims. The management anticipates that production normalization could restore some cost efficiencies, potentially recovering up to INR 1,500 per ton by the end of the next two quarters. They express confidence that most of the reported inefficiencies were temporary.

Capacity Expansion Strategy

Tata Chemicals is progressing with significant capacity expansions on multiple fronts. Plans are in place to expand silica capacity by 60,000 tons, expected to generate around INR 500 crores in revenue within the next 24 to 36 months. They are also finalizing expansion plans for 400,000 tons of soda ash in the U.S. and 300,000 tons in Kenya, all projected to complete over the next 36 months. The enterprise remains bullish on long-term demand for soda ash, driven by sustainability initiatives.

Outlook and Market Dynamics

Looking ahead, the management remains cautiously optimistic, suggesting that demand could stabilize as supply dynamics evolve globally. They anticipate that pricing may have 'bottomed out,' and expect better performance in the second half of the fiscal year, buoyed by increased production capabilities and an anticipated recovery in market conditions.

Earnings Call Transcript 2025-Q2

[Operator]

Ladies and gentlemen, good day, and welcome to the Q2 FY '25 Earnings Conference Call of Tata Chemicals Limited. [Operator Instructions].

I now hand the conference over to Mr. Gavin Desa. Thank you, and over to you, sir.

[Gavin Desa]

Thank you, Sagar. Good day, everyone, and thank you for joining us on Tata Chemicals Q2 and H1 FY '25 Earnings Conference Call. We have with us today Mr. R. Mukundan, the Managing Director and CEO; and Mr. Nandakumar Tirumalai, the Chief Financial Officer. Before we begin, I would like to mention that some of the statements made as discussions may be forward-looking in nature and may involve risks and uncertainties.

I now invite Mr. Mukundan to begin proceedings of the call. Over to you, Mukund.

[Ramakrishnan Mukundan, executive]

Thanks, Gavin. Good evening, and welcome to everyone to our Quarter 2 FY '25 Earnings Call. I will start the discussion with a brief overview of markets and go on to highlights of the operations. Overall, the demand scenario was balanced both in India and in Middle East. And in U.S. and most of the market, the container glass demand was down, except in Southern Europe, where I think the demand did improve during the quarter due to exports -- higher exports of beverages.

In China, the soda ash demand was strong right through up to August, September. And there has been some moderation as we speak, and the higher demand was met largely through some amount of imports into China, which went from U.S. to China. In August and early September, the supply was fairly stable within India. However, we had increased imports into India from Iran, Russia and Turkey. And U.S. exports also increased during the quarter, but the increased exports are mainly to exports to China and Southeast Asia. And there was a bit of moderation in the exports LATAM, which mainly followed through due to the moderation in some of the demand for lithium carbonate markets. Overall, I think the pricing remains stable. We believe the pricing has bottomed out across the markets. In terms of the other products which TCL is in, all the other products saw robust demand and continue to maintain a robust pricing and margin mechanism.

With respect to revenue, our revenue was up 6% sequentially due to higher volumes, mainly coming out of U.S. Indian volumes were lower and this was mainly impacted due to very heavy rains, which impacted our operations for almost 10 days. And this led to -- while quarter-on-quarter, when you look at annually the number Q2 of '24 and in Q2 of '25, the numbers are almost same. We were behind our -- a bit of an off-plan because during the quarter, we also commissioned around the month of September, all our expansion capacities came on stream, including our boiler, the soda ash capacity, the salt capacity as well as bicarb capacity. The operation has stabilized now and we hope from the quarter 3 onwards, you would see the throughput coming through from India from the expansion.

As far as U.S. is concerned, it saw a robust volume and both domestic and export markets continue to be robust as far as the -- our TCNA operations were concerned. U.K., of course, had lower volumes and pricing was slightly better, and we are running the operations to the best of our ability in terms of ensuring our margin profile is maintained. And the pharmaceutical plant was -- pharma salt plant was commissioned during the quarter. It is going through the first trials in fact, as we speak, the first salt out of the pharma salt has been produced and will be delivered to the technical market till we qualify from customers during the current quarter. Kenya saw higher volume and higher prices. Rallis had good performance, normal monsoon and very strong performance in double-digit growth in the domestic market.

In conclusion, we will continue to execute our long-term strategy of expanding the core and focusing on higher volumes and servicing our clients well and making sure we are agile and effective cost right across our operations. One of the key important parameters for us would be to ensure the second half of the year has much steadier operation than the first half. First half was impacted due to extreme weather in India. Hopefully, the second half will be much better.

With this, I hand it over to the moderator for Q&A.

[Operator]

[Operator Instructions] Our first question is from the line of Vivek Rajamani from Morgan Stanley.

[Vivek Rajamani, analyst]

Two questions from me. Firstly, just on India. Would it be possible to give some more color in terms of what was driving the mess? I know you mentioned that there were disruptions due to the weather, but if I look at the production and the sales number, the decline does not appear to be extremely stuck, but the impact on EBITDA obviously seems to be much more larger. So I just wanted to understand if you could give some more color in terms of what was going on this quarter and also things have normalized as we speak. That's the first question.

[Ramakrishnan Mukundan, executive]

Yes, things have normalized. And I think if you look at the volume numbers, broadly, I would say that about 30,000 tons of soda ash could have been produced more, while the sales are more or less the same when you look at quarter 2 and quarter 2, I would just say this weather impact has had 30,000 tonnes on source soda ash about 40,000 tonnes on salt. Most of the other products were okay.

The key issue for us has been because of the weather, even the plant was unstable. And there's a cost impact we've had almost equal to -- in our estimation, around INR 40 crores, of which INR 25 crores was on account of unstable operational increase cost because of -- and INR 15 crores is the insurance claim, which we accounted for in the books. It all is part of the EBITDA and the variable cost of the company.

[Vivek Rajamani, analyst]

Sure, sir. This is really helpful. And I know you mentioned about the insurance claim. So would it be fair to say that the INR 25 crores effectively becomes more normal now that the operation has stabilized.

[Ramakrishnan Mukundan, executive]

Operation stabilized. In fact, even the INR 15 crores charge we have taken on the -- see, the way we account for insurance claim is that we take 75% of the claim on account and 25% is actually charged off. Of course, we are fairly hopeful that we'll get the full insurance claim, and that is actually credited when it comes. So INR 15 crores represents the charge we have taken and INR 25 crores is also charge of overall about INR 40-odd crores the impact in this quarter because of inefficient operations.

[Vivek Rajamani, analyst]

Sure, sir. That is really helpful. And just the second question that I had was, I know you would be getting into the contract discussions for U.S. going into 2025, just wanted to -- if you could give any sense in terms of what kind of discussions you're having for your annual contracts that would be very helpful. And also, if you could just give some color in terms of what kind of export pricing you're seeing out of the U.S. right now?

[Ramakrishnan Mukundan, executive]

So in terms of contracts, I think I would rather let them settle. But as I said, the most domestic markets are balanced and there has been -- see, in terms of overall performance and long-term performance, we are very bullish about India, bullish about the markets in Americas as I call it, because I would call it as a mix of both U.S. and Mexico together, and China has been robust all this while, but we do believe that the -- we don't have the real impact of what is the impact of this government's initiative to continue to keep the demand up domestically. So I think in a broad sense, what I mentioned is demand is balanced. And the bias is also at the balance level, neither strong or weak, we'll wait and watch how the contracting does turn out.

We are fairly hopeful that the long-term trends, which we have been highlighting, continue to move forward. Solar glass demand has continued to be robust. The issue remains in terms of lithium, there's been a bit of softness. The flat and flat glass has been fairly okay. The other chemical demand has been okay, there's been a softness in container demand, which has been more or less take -- all this softness has been taken over by the solar glass demand worldwide. So really, it is -- we remain watchful and we remain hopeful that the numbers, at least either tend to be where they are or they would be bias, but we are also in the current state of contracting. So I wouldn't want to say anything more.

[Vivek Rajamani, analyst]

Sure, sir. All the way best.

[Operator]

The next question is from the line of Abhijit Akella from Kotak Securities.

[Abhijit Akella, analyst]

Just on the stand-alone operations, just to understand if there was some impact of the commissioning of the expanded capacities as well. Was there any cost impact because of the unabsorbed capacities? And if so, could you please just quantify how much that might have been?

[Ramakrishnan Mukundan, executive]

Abhijit, it won't be a big number because the depreciation will start showing a little later, but we have actually ramped up as we speak to full utilization of the plant. So the additional capacity of the 2.25 lakh tonnes of soda ash and bicarb, which is about 140,000 tonnes and salt. I think more or less, we are ramping up. So we haven't faced any addition. The charge will be on the interest side. There are no major changes in the fixed cost or any other cost.

[Abhijit Akella, analyst]

Okay. So I mean, when I compare quarter-on-quarter, the India business EBITDA, it is down by about, I guess, INR 90 crores or so of which we just kind of broke out INR 40 crores because of the weather related factors. I guess there's some loss of volumes as well. But then what explains the rest of the decline in the EBITDA, quarter-on-quarter?

[Ramakrishnan Mukundan, executive]

So in terms of -- see, in terms of quarter-on-quarter, which when you look at previous year, broadly, I would say there is a 7-odd -- see it's about 7-odd, 7,000 tonnes less. So I think it's about INR 7 crores. and INR 37 crores is on account of cost, that's what I said INR 40 crores is -- INR 44 crores is the exact number. And there is also because of this unstable plant, there was also an impact coming in from other minor products, which we have in Mithapur, which is about INR 21-odd crores, which is cement, gypsum, bromine all put together between last year and this year. But this will be made up during the year. This normally happens when there is heavy rain, is a dip in the production and it comes and comes back later.

[Abhijit Akella, analyst]

Right. Okay. And the ramp-up of these expanded capacities, do we expect it to be vertical in the second half? Can we start running them at pretty much close to full utilization.

[Ramakrishnan Mukundan, executive]

See, I think we are speaking almost in the second week, and it's fully ramped up as we speak. So it is -- I wouldn't say vertical. It is as per our expectations. These are operations we know well, and they've just gone to full utilization.

[Abhijit Akella, analyst]

Okay. Great. And just one last thing from my side. Any signs of capacity rationalization in soda ash that you are seeing in either Europe or China at this point? And any deferment of previously announced capacity expansions by any of the major producers worldwide.

[Ramakrishnan Mukundan, executive]

The only shift has been, I think there's been a pullback of about, I think, 100-odd tonnes by [indiscernible] in U.S. and there's probably also an addition of 100-odd tonnes, but some debottlenecking in other parts. So it's almost like -- it is neither positive, nor negative. It just balanced it out in this quarter. We are watching very carefully.

[Operator]

Our next question is from the line of Ankur Periwal from Axis Capital.

[Ankur Periwal, analyst]

First question on the China demand. Last quarter, we did mention that while China demand is healthy, there is some volatility and this quarter, you again mentioned that till August, September, things were good and probably October is pretty weak. Any signs there to look at and especially given the stimulus that the government is giving there. It is still early days, but any on-ground feedback if you can share?

[Ramakrishnan Mukundan, executive]

We actually haven't seen any major reduction in whatever moderation we've seen in the lithium market has been more or less taken up by the solar glass market. However, we do believe in the second half, some of the supplies, which could be constrained in China may be coming on stream, which is why we're saying it probably is going to tend to more balanced situation. The U.S. exporters did end up exporting to China, selling shipments. I really would say that -- if those new -- those capacity stabilized and are available for domestic market, there will be less room for imports.

[Ankur Periwal, analyst]

Okay. Great. And second question on the U.S. side. Now there has been an improvement in volumes as well. Is it led by the domestic market here or more by exports? And secondly, on the Q-on-Q improvement on margins as well in U.S., if you can share something like that.

[Ramakrishnan Mukundan, executive]

So as far as U.S. is concerned, because of operational issues and other issues in India and other places we did postpone our shutdown, which would have come in the month of September to October. While that is one part of the story, I think they generally are producing much better than in the past, and that trend is likely to continue. There will be one shutdown in this quarter as well as next quarter. Overall, we expect to be ahead of last year in terms of overall volume. That is our plan. And we'll continue to ensure that our operations run there. And many of these operations are as the production continues to run at peak load, the effective cost of operation also comes down, which improves the margin.

[Ankur Periwal, analyst]

Sure, sir. And the margins that we have seen on the exports -- U.S. export side, has that improved? Or we are still running at those lower margins?

[Ramakrishnan Mukundan, executive]

I think our view is that the pricing, at least going forward, it's bottomed out, so it can't get worse from here.

[Operator]

The next question is from the line of S. Ramesh from Nirmal Bang Equities.

[S. Ramesh, analyst]

The first thought is on the India cost increase if you were to work backwards on the volumes you have lost, it's about $30 a tonne if you look at your average production per quarter. So once you stabilize your plant, will you be able to see this sort of improvement in margins in India of the order of $30 a tonne?

[Ramakrishnan Mukundan, executive]

Yes. I think more or less, you see out of the overall cost increase which you have incurred, which is about in you're saying $30, I'm saying INR 2,000, let me use the Indian norm, which I think INR 1,500 will certainly recover the INR 500, I think, will stick there. And that is our -- that is at least our line of sight to the next 2 quarters.

[S. Ramesh, analyst]

Yes. And on the new capacities, are you able to place the entire increase in production of 225,000 of soda ash and 140,000 of bicarb in a monthly or quarterly basis? Or will that take time in terms of placement rate?

[Ramakrishnan Mukundan, executive]

We don't anticipate by the time we finish this quarter or the beginning of next quarter, we will have any issues with this. Obviously, we are in the process of making sure we are able to place the product. And market demand has not been an issue in India.

[S. Ramesh, analyst]

Okay. So in U.K., we still see the bottom line in the red. So when do you think U.K. can turn around in terms of profit at the bottom line?

[Ramakrishnan Mukundan, executive]

Yes. I think the U.K. has had a bit of a wobble this quarter mainly on because of negative spark spreads. This has continued because of high wind energy. We also build power into the grid. And these were done at margins, which were fairly challenged. And we are hopeful that by the time we finish the third quarter, we should be order this problem.

[S. Ramesh, analyst]

Okay. So one last question I thought. When you talk about margin stabilizing, if there is further increase in China recently increased capacity, do you still think that based on that incremental supply within China, the prices have bottomed out? Or will that cause some more volatility or downside to prices?

[Ramakrishnan Mukundan, executive]

I think most people are -- if they export, they're exporting at cost or below cost. So I think we don't believe that there is any headroom for further -- unless some people are sitting on the inventory and there's a distressed sale, which we haven't seen. I think this is right about where the bottom because we've tested the whole thing entire quarter has remained more or less steady.

[Operator]

The next question is from the line of Saurabh Jain from HSBC.

[Saurabh Jain, analyst]

My question is, again, on the India business. You're saying that you would be able to kind of ramp up your capacity? I mean, for you to utilize your capacity, the new capacity easily over the next 2 quarters. And then there is a news piece, which highlights that Indian players have requested for investigation and kind of imposed in anti-dumping duty on soda ash in India. So can you give some thoughts around that? And also highlight what is the size of injury that you're expecting? What -- if it comes through, then what would be the benefit on the utilization margins with the ATD.

[Ramakrishnan Mukundan, executive]

The investigation is being done by DGTR in the Ministry of Commerce, I think we will let that process continue. So it's a quasi judicial process. So I would not want to make a comment on it. It has been taken up suo moto on the basis of surge in imports mainly coming from Iran and Russia and also partly from parts which we have not seen. So I think they will look at a fair margin and will settle at a fair margin.

We will submit the data to them. It is usually a very clear mathematical process. So I think that's what we'll go through. So I'm not wanting to hazard any piece here because we are in the process. We would make our submissions I'm pretty sure the exporters from Russia, Iran will also make their submissions and we will see what the outcome is. But we are very hopeful that the unreasonable pricing, which is usually done at cost or below cost, it should not be -- will be looked at by the government to make sure there are enough safeguards there.

[Saurabh Jain, analyst]

That's helpful. And also if you can also highlight how is the Mongolia capacity kind of doing what is utilization over there? There were quality issues with that production, any changes over there?

[Ramakrishnan Mukundan, executive]

So this is what I mentioned that in case that capacity is fully absorbed and those issues stabilize, I think the imports will tend to moderate into China. So we have to watch for that. And it's mainly that has played a big growth in the increased exports into China. So we will see how that progresses. Usually, my own estimate is when anybody starts a new plant, they should stabilize it within 90 days or maximum. So it will happen at some point. For example, for us, it took about 10 or 15 days to get it stabilized, but sometimes, it lasts longer, but it's never been more than this.

[Saurabh Jain, analyst]

Okay. But wasn't this capacity already live in last quarter?

[Ramakrishnan Mukundan, executive]

That's right. That's right. I think it is not about quantity, I think there are some issues about some quality issues, which also should get sorted out in normal course. This is a process which everybody undergoes. So I would reckon that this should come in at some point of time, which is why I was highlighting that there could be a moderation in China imports because at some point, this will come in.

[Saurabh Jain, analyst]

Understood. My next question is, how would you see your silica and nutraceutical segments kind of going over the next 3 years? We understand there is some kind of capacity expansion for silica. But any views or thoughts when do you expect this business to turn a bit positive and go really big in size and in what time frame?

[Ramakrishnan Mukundan, executive]

So I think as part of the presentation, I've already highlighted that we are adding 60,000 tonnes of silica business at which point of time, this is likely to be having a run rate of about INR 500-odd crores in revenue. And this project will get a formal approval, I think, somewhere in this quarter. And we -- it will be 3 modules of 20,000 tonnes each. Currently, we are only 10,000-tonne capacity plant. And we have we have perfectly got products, which have been approved by most of the tire customers. We had -- as you know, we had a food line and a tire line of 5,000 tonnes each during the quarter, in fact, we shut down the food line to convert that completely to tire line so that we cater to tire customers.

And going forward, this 60,000 tonnes will be pure tire grade silica, which the execution time is about in a phased manner about 24 to 36 months. The first 20,000 tonne stream will come in close to 24 months and the -- each one will come 6 months separated by 6 months by 36 months, we should be right up to 60,000 tonnes. So it's about 2 to 3 years away. But at the end of that, it will be at least INR 500 crores. And India's potential -- our own view of our own potential is to add at least another 150,000 tonnes. So this is almost a INR 2,000-odd crore business. But our first step is to move from the current revenue basis to at least INR 500 crores.

[Saurabh Jain, analyst]

So when you achieve that run rate, are you confident you will be achieving profitability in that business?

[Ramakrishnan Mukundan, executive]

Yes. The basic point is that for our expanded capacity, the see the issues, most of these are now brownfield. They are not greenfield. So there is not a big increase in fixed cost. So the entire contribution with -- almost 80% of that will move into the bottom line. That's really the benefit we are seeing in all these efforts we are putting in, including the one we have done in bicarb, soda ash, salt and also in silica when it gets executed.

The next phase of soda ash expansion also is underway, which also will go for formal approval and we will come back to you. But we already highlighted the next phase is 0.316 of soda ash and another 2.3 lakh tonnes of salt -- 230,000 tonnes of salt, as part of the PowerPoint, which we did circulated.

[Operator]

The next question is from the line of Sumant Kumar from Motilal Oswal.

[Sumant Kumar, analyst]

Can you talk about the capacity expense and what we are talking about earlier for U.S.?

[Ramakrishnan Mukundan, executive]

U.S. capacity -- sorry, can you repeat the question?

[Sumant Kumar, analyst]

The U.S. capacity expansion plan?

[Ramakrishnan Mukundan, executive]

U.S. expansion plan, as I said, our plan is to add 400,000 tonnes, and that is pretty much on schedule. We are working our way through all the clearances. We expect to get all the clearances by March of next year. And then the execution will start. In the meantime, we are also continuing with our design engineering work so that we can be ready when we can press the button. We are also tying up various other logistic capacities, the capacity is needed for input materials, including supplies of utility and everything. So all that is being under work, and it will probably hit a formal go button when once we get the regulatory clearances, we expect somewhere around March.

[Sumant Kumar, analyst]

And can you talk about the Kenya capacity expansion for the year earlier getting from the news?

[Ramakrishnan Mukundan, executive]

Kenya capacity is going to be a modular capacity because we are trying out for the first time, electric calcination, which is much lower in carbon intensity. It's a green process. And that implementation is already underway. It will happen modularly. So we're first testing it out and then the overall modular capacity expanded in about 36 months will be another 300,000 tonne out of Kenya.

[Sumant Kumar, analyst]

So incremental 3 lakh capacity, right?

[Ramakrishnan Mukundan, executive]

Yes. 3 lakh capacity in Kenya and about 400,000 in U.S. and 320,000 in India. So all put together 1 million tonne across these 3 sites.

[Sumant Kumar, analyst]

And what is the time line till what we are going to compete with?

[Ramakrishnan Mukundan, executive]

Most of them would be done in about, I think, approximately 30 to 36 months.

[Sumant Kumar, analyst]

So in 3 years?

[Ramakrishnan Mukundan, executive]

Yes.

[Operator]

[Operator Instructions] The next question is from the line of Saket Kapoor from Kapoor Company.

[Saket Kapoor, analyst]

Sir, if you could just highlight to provide us some key inputs of this soda ash conference that was during the first week, rather 9, 10 and 11 of this month, and we were one of the participants. What are the key pillars? And if you could just throw some light on the same?

[Ramakrishnan Mukundan, executive]

Yes. I think broadly, with 3, 4 key points, which at least I understood because I did not participate in that, and we tend not to participate because of our own view of antitrust regulations. Our sales, some people from our sales team have gone. And clearly, the view is that the long-term demand trend for the soda ash business is on a positive trend because it plays into sustainability team.

The key issue is going to be, while the demand is on a positive trend. The customers are going to demand a low carbon footprint soda ash. So we have to pivot our electricity utilities over a period of time to renewable and also find solutions for the replacement of coke with electrics and other forms of calcination. I mentioned to you the first place we are trying it out is in Kenya. And most companies are trying different routes. And the second piece is that there is a continued view that while -- some of the sectors have seen a bit of a softness, especially in lithium. The long-term trend is positive. And the capacity expansion now, the bulk of it opportunity would lie either in U.S. or in India because these are the places which are now most attractive for capacity expansion in U.S. in terms of natural capacity in India in terms of synthetic.

[Saket Kapoor, analyst]

And sir, if you could provide us with the net debt numbers, and we have also find that the freight cost are higher. So is it because of the increased tonnage or the Red Sea issue that we have higher freight cost, the forwarding freight and forwarding charges.

[Nandakumar Tirumalai, executive]

So on the net debt number, it's there on Slide #4. It is up by INR 43 crores for the last 1 year's time, and stands at INR 5,190 crores as of last month ending. INR 5,190 crores, okay.

[Saket Kapoor, analyst]

And what are your current majority, sir, for this year?

[Nandakumar Tirumalai, executive]

This year, not much -- majority is happening in '26, '27.

[Saket Kapoor, analyst]

Okay.

[Nandakumar Tirumalai, executive]

Yes. Second question is what.

[Ramakrishnan Mukundan, executive]

Freight, I think if you look at freight and forwarding charges, almost flat sequentially. There's not much of a change. And there is certainly an impact of what you mentioned, the -- in some of the freight markets have certainly increased in rates. But sequentially, there's no increase.

[Operator]

Ladies and gentlemen, we would take that as our last question for today. I would now like to hand the conference over to the management for closing comments.

[Ramakrishnan Mukundan, executive]

Thank you all for this -- attending this earnings call. And as I mentioned, we are clearly focused on delivering our annual commitment. And this quarter was a bit wobbly, especially coming out of the heavy -- impact of heavy rains and Indian operations as well as the negative spark spreads, which we had in the U.K. hopefully, we'll address these going forward in terms of delivering a much better Q2, much steadier Q2 in India and all parts of the world.

And in terms of the strategy, our strategy continues to remain to expand our core business across geographies ensure that we focus on operational excellence and servicing our customers well. And we will also soon see our growth in the new areas, which we spoke about in silica especially and hopefully, the turnaround in Rallis subsidiary has also begun well and we hope to continue the moment positive momentum there to. Thank you all, and see you in the next quarter and a happy festive season.

I just wanted to say that broadly, we continue to get the same kind of, let's say, vision and overall future approach, which our Chairman Emeritus always gave us. His counsel and his guidance will continue to guide this company forward, and we all pay homage to him in this quarter. And the best way of paying homage to him is to deliver the outcomes, which we have all spoken about. Thank you.

[Operator]

Thank you. On behalf of Tata Chemicals Limited, that concludes this conference. Thank you all for joining us. You may now disconnect your lines.