Tata Chemicals Ltd (NSE: TATACHEM) Q1 2026 Earnings Call dated Jul. 25, 2025
Corporate Participants:
Unidentified Speaker
R Mukundan — Managing Director and Chief Executive Officer
Analysts:
Unidentified Participant
Nitesh Dut — Analyst
Vivek Rajamuni — Analyst
Saurabh Jain — Analyst
Abhijit Akela — Analyst
sumanth Kumar — Analyst
Ramesh — Analyst
Rohit Nagraj — Analyst
Noshal Chaudhary — Analyst
Presentation:
operator
Good evening ladies and gentlemen and welcome to the Q1FY26 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 an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference, please signal an operator by pressing STAR and then zero on your touchtone phone. We have with us today R. Mukundan, managing director and CEO and Nandkumar Thirumalai, chief financial officer of Tata Chemicals Ltd. 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.
I now invite Mukundan to begin proceedings of the call.
R Mukundan — Managing Director and Chief Executive Officer
Thank you and good evening and welcome everyone to our quarter one FY26 earnings call. I’ll start the discussion of the brief overview of industry then our operational highlights across business and geographies. The market conditions remain fluid and balanced. Overall global demand is estimated to be flat in the near term due to uncertainty associated with some of the trading issues. The market condition remains steady in view of demand being stable in India, China and some parts of other regions including I would say Americas excluding usa. Though demand supply balance continues to be balanced, there are uncertainties in tariffs because the consuming industries which will continue to weigh in on market in the immediate term and as this uncertainty disappears we could begin to see some more balanced approach to market growing.
All soda ash market continue to be oversupplied with high inventory levels in most regions. China inventory remains high at 1.8 billion a slight increase over prior quarter. This is going to continue to keep the market pricing range down. In India the soda ash list prices remained unchanged on an average. Import prices remained range bound between 230 to $235. Although MIP has been extended, it has not had much impact on prices in us. The export pricing to Asia continued to be under pressure and now has reached a balanced number. Overall we expect pricing to remain in similar level at least for next six to nine months in terms of company’s operational performance.
Company reported quarter one FY26 on a consolidated basis, revenue from operations 3719 crores and a bit of 649 crore and a PAT of 316 crores. For quarter one the standalone revenue of 1169 crores had an EBITDA of 270 crore and a PAT from continuing operations of 307 crores. In India the performance is higher compared to previous year mainly due to higher volumes operational efficiencies partly offset by a minor drop in realizations of soda ash and b quarterly sale. Volume of all products increased including FOS to 869 metric ton as compared to 614 metric ton in quarter one.
US overall both export sales and prices were marginally lower. The export sales impacted by a spillover of the ship shipment to next quarter. In UK the cessation of low stock operation led to a lower volume and the other parts of the business which are continuing had better financial operation. Kenya saw slight lower volume however prices were maintained as that of Q1. FY25. Rallis saw an overall growth of 22%, a volume growth of 9 and price growth of 13 driven by growth in crop care and seed business and EBITDA. Margin stood at 16% and a PAD growth of 100% in Q1.
In conclusion, we remain focused on ensuring that we focus on customer delight and serving our clients well. We continue to focus on ensuring that we deliver on our outcomes in terms of volumes, cost and working capital efficiency. With this I close my opening comments and hand back to the moderator to open for Q and A.
Questions and Answers:
operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press Star and one on the Touchstone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question and to limit their questions to two per participant. You can rejoin the queue in case of further questions. Ladies and gentlemen, we will now wait for a moment while the question queue assembles. Our first question comes from the line of Nitesh Dut from Anandrathi Institutional Equities.
Please go ahead.
Nitesh Dut
Yeah Hi team, good evening and thank you so much for this opportunity. So my first question is on. I mean you mentioned in your opening remarks that on the presentation that prices continue to weaken during Q1 and the overall global demand is also estimated to be flat in the near term. So if you could give some color on the extent of the price decline that you’ve seen in Q1 and Q2 so far and what would that mean for company profitability going forward? Reason wise possible given that India has some benefit of MIP till December but for the other regions how is it likely to play out?
R Mukundan
So firstly MIP has had no impact. So let me just highlight so it is the changes in the pricing has been fairly range bound. It has been between three to five dollars at best in some pockets. It may be $10, but that’s the kind of production we’ve seen in most domestic markets. What we have seen is, and if you take a trailing quarter basis, this would be very marginal shift in terms of three to four dollars between last quarter to this quarter. And we believe that prices have more or less bottomed out. It’s going to remain in this broad range.
Nitesh Dut
Sure. And sequentially the India business and even the US business witnessed a decline in volumes. So what exactly drove the improvement in profitability? I mean for both these markets? If you could just give something and I understand, I mean as you mentioned in the opening remarks. Yeah, please go ahead.
Nitesh Dut
Sorry.
R Mukundan
The US sequentially I said, is a spillover so that 40, 50,000 ton would catch up in the next quarter. It is just a shipment timing issue, nothing to do with. And India too, we see no major issues. We should be clipping around the numbers we had in the previous few quarters.
Nitesh Dut
Right. Just one last thing. So you had planned a structural EBITDA improvement of about 600, 650 crores through, you know, through shutdown of loss making UK assets and volume ramp up in India, Kenya and you know, the cost efficiency initiatives that you’ve mentioned about. So do you hold on to your outlook for FY26 considering, you know, some softening further on the soda ash pricing?
R Mukundan
Yeah. So let me clarify. I think while prices are softened also the input variable costs have come down by almost the same number. That is why the numbers are holding. So I did not speak about the cost side, but having said that, I think our number, which is broadly what I indicated was 600 crores split equally between reduction in the, let’s say unviable operations in UK. 200 odd crores in terms of additional bottom line contribution from new projects getting Commission and another 200 crores in terms of cost improvement. I think still stand still hold fine for the full year.
Nitesh Dut
Great sir, thanks a lot and wish you all the best.
operator
Thank you. Our next question comes from the line of Vivek Rajamuni from Morgan Stanley. Please go ahead.
Vivek Rajamuni
Hi sir, thank you so much for the opportunity and congratulations on good set of numbers. Just wanted to dig in a little bit deeper on previous participants question. If you could just give a bit more color on what’s driving the sequential improvement in both India and US given that the volumes are lower but the. Profitability seems to be a lot more stronger. Any specific reasons for that? And that’s the first question. Thank you.
R Mukundan
See, as far as the US is concerned, the main driver of the shift is One is the volume mix. I think there’s a greater share of domestic sale versus export sale in this quarter but that will correct itself as it goes into the future quarter because the shipment which got delayed was because of the. Because of the. Mainly because of the issue on export consignment. So the net realization and net margins have been higher because there’s a higher proportion of domestic. So it’s a mixed issue in the U.S. in addition to that they’ve had a lower fixed cost.
So that has led to the overall improvement in the ebitda. And India is purely a volume level change. The fixed costs are more or less in line. There’s a marginal increase but that was expected because new capacities were coming on stream.
Vivek Rajamuni
Sure sir, thank you so much for that. So just a clarification. Given your opening remarks where you said that you know there’s not been any significant changes in pricing, some minor guards, would it be fair to say that the Q4 EBITDA numbers for both India and US may be the more normalized numbers going Forward or the 1Q numbers should be more of a normalized benchmark assuming no significant changes in pricing.
R Mukundan
So broadly? I think in US as I mentioned, the mix will normalize. So because of the mix there is probably going to be in quarter two because quarter two will have higher share of exports and lower share of. I think you would see that getting into a zone which is slightly lower than this quarter. In addition to that there will be some additional costs in terms of fixed costs. So I think US should tend to drop a bit because of the two drivers which are basically export, domestic mix and the maintenance and fixed cost. So that’s really the driver there as far as India is concerned.
We do believe that it is going to remain range boundaries more or less what we are clocking. We may not see any major shift if at all there’s any big shutdown which is coming. It is in Kenya but we have enough stocks to serve the market. The quarter two.
Vivek Rajamuni
Great job, Very clear. And just the last one from me. Given the recent news flows that the Chinese government is looking to is looking at the excess capacity that’s there across the petrochemicals and the chemicals landscape. So I just wanted to hear your thoughts. A few things that could drive any kind of benefit from a sodash perspective. Thank you very much.
R Mukundan
So all we are saying is there have been efforts by several governments. Chinese government is trying to do its piece, Indian government has put mit. But in terms of market behavior and market condition, if we see an early Sign I will report back next quarter.
Vivek Rajamuni
Thank you very much. And all the way back.
operator
Thank you. Our next question comes from the line of Saurabh Jain from hsbc. Please go ahead.
Saurabh Jain
Thank you for the opportunity. My question is on the UK business we saw that the margins have kind of improved sequentially obviously because of the product mix. That is for now but wanted to know your sense whether the current run rate is what something you expect to continue for the rest of the year or there is more room for improvement in terms of profitability and EBITDA that. You deliver the uk.
R Mukundan
I think there are two big drivers of the shift which will happen I think the quarter one, they have had to buy CO2 from market so they announced CO2 production should start this quarter. Secondly the pharmaceutical grade salt plant has been commissioned but right now they are going through a process of qualification with customers that should kick in maybe in the second half of the year. So I think there will be two further drivers to move. We do expect to run the year towards exit during towards the third and fourth quarter with at least balanced zero losses at the PAC level in the uk.
So I think the drive is towards that and the two drivers of that are fundamentally the shift towards own CO2 which is obviously lower cost and also sales and approval of pharmaceutical grade salt from the customers in the second half.
Saurabh Jain
Okay, any numbers that you can share how much of savings are you targeting from this in house CO2 captive plant?
R Mukundan
We can’t give specific but I already sort of highlighted that we do expect that the 31 negative which you see should disappear.
Saurabh Jain
Okay, thanks. And what happened to the Kenya margins in this quarter? It kind of saw a big decline sequentially. So any light on that?
R Mukundan
I think fundamentally the sale of the proportion, the mix of sale in the local African market had reduced. We are that should be back up as we move through the year again. So whenever they export more towards Southeast Asia versus domestically in Africa I think the margins tend to shift. I think that would be back to normal.
Saurabh Jain
Okay, understood. Separately there is a comment in the presentation that The PAT includes a 75 crore on account of income tax refund. Where is it reflecting and is it in the India business?
R Mukundan
That’s an India business there both in the other income line interest and the tax line.
Saurabh Jain
Okay, but what is it relating to?
R Mukundan
We got income tax refund order in the month of May towards the old case we had that was in our favor. So that came in the month of May and we got a tax order for refund for both interest and tax. Actually we had also informed the stock exchange in the month of May. If you look at notice released by the company, the details are there on the stock exchange.
Saurabh Jain
Thank you. And one last question. What is the progress on the Kenya capacity expansion? What is the update there?
R Mukundan
Yeah, I think that’s what I said. We. We have commissioned a 50 kiloton calciner and it is going through what I call as the trial runs as we speak. So sometime during the second quarter it should be delivering products towards the market. But we will clarify that specifically with more colors in the quarter two. But it is being commissioned, it’s going through trials right now.
Saurabh Jain
Okay, thank you so much.
operator
Thank you. Ladies and gentlemen, we request you to please restrict yourselves to two questions per participant. You may rejoin the queue for follow up questions. Our next question comes from the line of Abhijit Akela from Kotak Securities. Please go ahead.
Abhijit Akela
Good evening and thank you. The sharp decline in power and fuel cost this quarter on a quarter, on quarter basis, sequentially, is that primarily led by lower coal costs or is it the UK closure? Please help us understand.
R Mukundan
Yeah, it is a combination of the two. It is also led by lower gas, lower coal and also cessation of the operations.
Abhijit Akela
Okay, so this is a sustainable number going forward, right?
R Mukundan
Yes, this is a sustainable number. And also there could be savings because some of the optimization work is yet underway. So that’s where we are. But should be sustainable.
Abhijit Akela
Thank you. And just on the UK expansion, sorry, the turnaround there was this sodium bicarbonate project that we had planned. So is that still on track? And if so, by when could we.
R Mukundan
We are going through right now. The design work is still continuing and as we speak we are continuing to progress that. But our first effort during the current year in terms of the needle is to make sure that we get at least we end the year at a break even at the PAT level. That’s what we are working towards. Making sure that all the projects commissioned and all the existing capacity of bicarb is back on stream in a balanced way. Because they had to reconfigure the unit because it doesn’t no longer have a soda ash unit attached to it.
They’ve also going to qualification of the pharmaceutical.
Abhijit Akela
Sure. Thank you. Just one suggestion from my side. I believe previously we used to offer the geographical split of the US volumes. I’m not sure I see it anymore in the presentation, but it would be helpful if you could start getting that again. Once again, thank you.
R Mukundan
Thanks
operator
Thank you. Our next question comes from the line of sumanth Kumar from Motilal Oswal. Please go ahead.
sumanth Kumar
Yeah, so my question is for India and we have seen a big time improvement. So is there any kind of the contract revision of the contract for soda as which is helping us? The margin improvement or a benefit of any input cost or sales Solid business has better margin in this quarter.
R Mukundan
All in all I think the cost variable costs are down per term basis because there’s been highlighted by several speakers, several analysts, the coal prices have come down. So that is certainly helping us.
sumanth Kumar
We can’t hear you. Can you, can you speak?
R Mukundan
Is it clear now?
sumanth Kumar
Yeah.
R Mukundan
So I said as a cleanup. So we’re getting an echo from your line.
sumanth Kumar
No. Okay.
R Mukundan
Yeah. So the, the variable cost was certainly lower. You’re still getting an echo from your line.
sumanth Kumar
Sir. You may proceed.
R Mukundan
I have.
sumanth Kumar
Yeah.
R Mukundan
Okay. So as I was mentioning, the variable costs are certainly lower on account of coal and other input costs. Also the higher volumes and in terms of pricing, as I mentioned, it is rainbow in some pockets. It’s dropped a little but it’s thereabouts. So the real driver of this number is really higher throughput and making sure that our fixed costs are more or less even Stevens and in line with what we budgeted. So it’s basically variable cost and volume.
sumanth Kumar
Okay. And can you talk about the CAPEX for this year and capitalization for calculation? Also.
R Mukundan
Last year we had a free capex cycle on account of the expansion in India. That’s not over. What’s going to be this year is only the operational capex for all geographies and roughly our 1000 crores we incur every year on the operational capex. Not much growth capex left to pay. Everything is done last year.
sumanth Kumar
Capex this quarter. This year, yeah. So what is the maintenance? What is this? How much maintenance CAPEX this year? Around thousand crores, you can say for the full year across the globe. Maintenance CapEx. Okay. Okay. And anything about the US expansion and so by carbon we were discussing earlier.
R Mukundan
As of now, I think we, we are continuing to push ahead with the expansion and growth in Kenya. We will certainly be looking at opportunities for growth in India. Also the next phase of growth in Metropolis being worked out. We’ll come back with specific number towards the third quarter of this year. While the design work in US is continuing, we will press the pedal on that only when the market conditions seem to be clearer to us. As of now we put it on a pause. But it, it will be a pause for either a couple of quarters or maybe a year.
But the moment market Conditions are clear. We would. So the work is continuing. The approval from the environment authorities, public hearing approval has been obtained. So it is pretty close to getting all the necessary approvals. But it’s internally we are awaiting the right time to press the.
sumanth Kumar
Okay, last soda aside, the demand supplies scenario and balance and going forward, do you think in next three, two to three quarters we can have some balance? So as demand, demand, supply and any sense on that, any timeline when we can see us some. The tightness in the demand supply.
R Mukundan
The current situation we are facing, there’s not a demand problem. Demand is actually very fine. The demand is growing as per our projection. There is no issue at all with the market and the demand side. Our issue is more from the excess supply and the continuing operation of unviable units. If you look at the ceiling of operation, only two people have announced the announcement. One is us and also the other third second largest player in Europe has also announced seizing one of those operations. We’ve just heard some news of a Chinese unit going into long maintenance shutdown.
Whether it is seizing operation or this unit is. This unit is Shandong Haihua which is considering idling capacity. But we’ll have to see as these announcements come. So actually the big issue in terms of the needle moving will be on the basis of either plants idling capacity or taking a pause for a certain period of time till the production catches. Demand catches up. Right now it’s not a demand issue, it is fundamentally a supply issue. Buy some units which are unviable.
sumanth Kumar
Okay, thank you.
operator
Thank you. Our next question comes from the line of S. Ramesh from Nirmalbang Equities. Please go ahead.
Ramesh
Good evening and thank you very much. So if you look at the China prices, so they are at about $150. So to what extent is the market in Asia already discounting the entire excess supply from the Namanguri expansion? Or is this still some more increase in production from Mongolia which can put further pressure on Asia prices?
R Mukundan
So it’s really Mongolia expansion has come on stream, which we knew. But I think the real issue is that at these prices, many of the units in China are not viable. So I think there’ll be some moment which needs to happen there. So really the Mongolian unit is fairly competitive. It’s a natural storage. It is really the synthetic soda ash which have to take the call. We had to watch the news.
Ramesh
So is the entire Mongolia capacity in operation now at 5 million tons?
R Mukundan
Yeah, more or less.
Ramesh
Okay, so in terms of the PNDL now, can you give us some sense in terms of the sustainable run rate for depreciation, interest expense and tax rate, particularly with reference to uk because there you have taken out one asset for the lost stock facility. So you can put these things in perspective for UK as well as the company to be useful.
R Mukundan
Yeah, I think if you take the current quarter number more or less, it will be somewhere around 5, 10 crores around that number in terms of depreciation, amortization and finance costs. Depending on how quickly we can start to pay down debt, we will make some effort. During the year it will start to also go down. But the run rate mentioned in the current quarter should be what we would what one should expect during the year.
Ramesh
And what about the tax rate Tax?.
R Mukundan
Because the current quarter has those tax refunds, therefore we can’t generate that. So I mean it will be depending upon the full year’s profit numbers. What comes tax as a for the full year it’s got one offs.
Ramesh
Okay. And so if you were to dwell on the UK business, the EBITDA margins have improved. So in terms of the run rate, say over the next three quarters this year and then FY27, would we go back to the British or gross margins and EBITDA margins? And when you ramp up the pharma business, do you think that entire volume can be placed next year?
R Mukundan
Yeah, I think that is what we expect will happen. So effectively you will see a quarter on quarter improvement in the trend in terms of uk. By the time you come to the fourth quarter, you will know exactly what will be the sustainable numbers or thereabouts as far as UK is concerned. So every quarter will be better than the previous quarter because as we start to stabilize the Picard unit with the new power configuration and having enough CO2, that structure will improve as the pharma salt starts to get into the market. In terms of that there is a higher margin.
So it will start to impact or at least show that in the result. So we expect every quarter it should sequentially continue to improve.
Ramesh
So one last thought. On the India expansion, you have seen about 32,000 increase in soda Ashton Yoy and another about 12,000 in bicarb. So will we see the entire capacity from the expansion being placed in the second half of soda as in bicarb or will it take some more time?
R Mukundan
The only one which is ramping up every quarter every month is the bicarb. Because as you know bicarb we will work with our customers in developing application. So the utilization will continue to trend up. If you say that broadly, I would say about 20 or 1000 ton of that will 5000 tons per month approximately is the amount which we can make up as we move towards the end of the year. In terms of soda ash, there is no issue in terms of placement of the product or market issue.
Ramesh
In spite of the slowdown in auto and the container glass, you don’t see a challenge on the Indian markets.
R Mukundan
Overall demand there is. India will continue to show our assessment of the market at least for the first two quarters of the calendar year. Indian market has continued to grow. There’s a slight dip in Chinese market by about 1% and then we anticipate for the full calendar year market other than North America, which is in South America will also show growth and China is a slight dip, India is the growth and US is flat.
Ramesh
Thank you very much and wish you all the best. Thank you.
operator
Thank you. Our next question comes from the line of Rohit Nagraj from BNK Securities. Please go ahead.
Rohit Nagraj
Yeah, thanks for the opportunity. It might be slightly repetitive question but I’m just referring to our Q3 presentation where we have given the expansion project pricing sodash India 3.2 lakh tons, silica 0.6, sodash US 4 sodash tamia 3.5 and bicarb UK 1.8. So given the current circumstances, are there any deliberate delays on these projects and what are the timelines that we are missing for all the five projects and the overall CAPEX as of now, which is NBC policy. Thank you.
R Mukundan
In terms of, as I mentioned, the design work and the public hearing approval for the US Sodash has been obtained and so it needs just one more notification to get a full clearance. So the work is the phase, but that is the one which is on pause as we speak. As far as India Kodash is concerned, over 320,000. Broadly we are looking at doing it in two steps of 150 and 170,000 tonnes. We will come back to you by the second third quarter in terms of the operationalization of that as soon as the details are clear.
But it is going to be more like a debottlenecking at a low cost rather than full expansion as we have thought of before because we do believe there are headrooms available in balancing capacities to do it at a much lower cost. In terms of UK bicarb this year we’ll be spending time on making sure our current existing 80,000 ton unit is fully run in a proper manner before pressing the pedal there. Again, design work is on its way and in terms of the silica we are going to do this in two phases. The first phase would be half of the number there which is already undergoing.
I think the execution is just about to begin. Sure.
Rohit Nagraj
Thanks a lot. That’s all from my side. Thank you and all the best.
operator
Thank you. The next question is from the line of Ankur from Axis. Please go ahead.
Unidentified Participant
Yeah, hi sir, thanks for the opportunity. Just a clarification on our U.S. eBITDA, you know, for this quarter. So if I look at Q on Q given that, you know, large part of the business is contractual wherein we enter into contract for the full calendar year. I’m just trying to better understand the Q and Q variation here. You did explain on the volume bit. Because of the delayed shipment volumes were lower. But it is purely because of lower exports that there is a sharp jump. Almost, you know, 100 crores or jump on the EBITDA. Is that a fair enough?
R Mukundan
I mentioned two factors. One is mix is correct. The second one is a lower fixed cost. The fixed cost may normalize next quarter and broadly the range you’re looking at is about $2.53 million up. Move on that. That’s what we think on the fixed cost will move fundamentally that is a second driver which is here in addition to the mix.
Unidentified Participant
Sure. So from a steady run rate perspective, what should you know that number be? Let’s say a 150 crore odd on a steady state basis, give and take on a quarterly run rate. We can comment on that. Yeah, I don’t know. It’s a forward looking thing.
R Mukundan
Sure. Will go up quarter on quarter next quarter because we have some, you know, savings in QAGA come up in Q2. Apart from that, the mix will change in Q2 because of the export being more than domestic. But we can’t comment on the exact numbers of what we run rate going forward.
Unidentified Participant
Sure, no problem. Just you know the share of exports in US was around 60% last quarter. What was that number in this quarter?
R Mukundan
We’ll come back on that. The export consignment which got delayed to next quarter was about 45,000 tonnes. That’s the indicator I’ve already given. I think in terms of if you wait for the second quarter result, the H1 will be fully indicative of what the normalized number are likely to be.
Unidentified Participant
Sure should be good. Second question on the Kenya side. While the volume run rate is slightly lower versus what we have seen in the earlier quarters, the margin hit is there again. So the volume loss is largely because of the weaker domestic demand. Will that be a fair understanding?
R Mukundan
No, not weaker Domestic demand. I think it is mostly led by two factors. One is, I think there was one basically one delay in the shipments to Southeast Asia which is not related to any shipment issue but is a customer asking us to hold back some additions in Southeast Asia which will catch up during the year. And the second is that half of it is due to the domestic African supplies which we are hopeful that we will make up during the current quarter.
Unidentified Participant
Okay, fair enough. That’s helpful. Thank you sir. And all the best. Thanks.
operator
Thank you.
operator
The next question is from the line of Noshal Chaudhary from Aditya Birdla Mutual Fund. Please go ahead.
Noshal Chaudhary
Thank you. A few basic clarifications. First on the soldiers prices in different geographies. Just want to check are different geography prices more or less largely correlated or do they move in different directions?
R Mukundan
So your question is are they all moving in the same direction or different direction?
Noshal Chaudhary
Historically the prices.
R Mukundan
I get your question. Historically the US domestic tends to be more or less steady and it is the pricing is linked to only the US domestic market. Indian pricing again is more or less import parity. But there is also the issue of the Indian domestic pricing having a slight premium because of issues related to to port and other handling charges and elements. And the true variable number actually is in Southeast Asian market where there is no domestic producer. So really that’s the one which gets impacted in terms of the pricing worldwide. So all regions tend to have a localized number.
The one which moves in sync with the Chinese price is the Southeast Asian market.
Noshal Chaudhary
Different prices are fine but just wanted to understand if everything moves in a similar direction will not because you see.
R Mukundan
The US and US is on annual contract domestic market so really it will not see any shift at all. Whereas the pricing in Indian market is quarterly so it will shift every quarter if at all. And some contracts are half yearly contracts so they are not going to move for at least six months. The UK market tends to be fully annual contract so they don’t ship during the year. And Kenyan exports are mostly quarterly to Southeast Asia as well as the Kenyan sales to US sales to Southeast Asia are also quarterly whereas US sales to Latam is mostly annual.
Noshal Chaudhary
Second, on the again on the soda ash pricing point of view, what do you think? What can you know, let the prices to drop further any possibility going down further from here on and if it has to happen, what should let this.
R Mukundan
So in terms of what we can control clearly is our internal cost structure which is what we are focused on. And Noshad in terms of what we have modeled is our Realistic expectation when I mentioned LD 600 crore improvement over last year split 200, 200 200. That is our realistic expectation of where we expect the market to be. At best I expect maybe a 50 or 60 crore move from what I mentioned overall in terms of numbers if you put in, not more than that.
Noshal Chaudhary
Last, on the from an export point of view, how long do you think soda ash typically is a product and travel globally in a normalized market condition?
R Mukundan
Can I repeat the question?
Noshal Chaudhary
From an export point of view, the soda ash product, how long can it be traveled in normalized market condition beyond which it’s not viable?
R Mukundan
Beyond which it’s not viable? Fundamentally for synthetic producer it cannot travel long because the variable cost of synthetic production is high and it tends to be mostly domestic or nearby markets. But for natural soda ash players, they have a headroom to travel with a freight cost of anywhere between 30 to 50 odd dollars anywhere in the world because the available cost is low.
Noshal Chaudhary
All right sir, thank you so much.
operator
Thank you. Our next question is from the line of Abhijit Akela from Kotak Securities. Please go ahead.
Abhijit Akela
Thank you so much for the follow up. Just wanted to clarify the previous comment regarding the 600 plus 200 plus. I’m sorry I couldn’t exactly follow what this was. Is this the EBITDA Delta that we. Are talking about for the upcoming year?
R Mukundan
This was in relation to what will be the key bundles of improvement between last year and this year in terms of the performance and I had mentioned there is because of cessation of operations in UK that we contribute about 200 outcomes. Crores. The increased volumes in India will be 200 odd crores and our own cost out efforts which we are doing both at variable and fixed would give us 200 odd crores. That was broadly the comment I had made last time and that is probably playing out as I expect.
Abhijit Akela
Okay, so 200 times three. So 600 is the total improvement on.
R Mukundan
A year on year basis which we expect during the year. UK is more or less in the bag. I think in terms of expansion also is more or less in the bag. I think the cost of those working progress which we are doing.
Abhijit Akela
Got it. Okay. Thank you so much and all the best.
operator
Thank you. Our next question comes on the line of mithil from unlisted india.com. please go ahead.
Unidentified Participant
Yes sir. I had a couple of questions. First on the natural industry. It is reported that In China also 2.8 metric tons will come into capacity in next year 2026 as well. Is that on schedule or it’s reported 2.8 million metric tons.
R Mukundan
Yeah, I think there is an effort to continue to keep adding capacity, but I think we’re also watching the space. I think this has to be first looked in the context of whether there’s a rationalization of synthetic capacity in China. There is already an effort and I think we need to watch this. So we’ll clarify this to you maybe next quarter. Very clearly where it stands regarding the.
Unidentified Participant
National production the we soda has bought Genesis in the previous quarter and now they are the leading producers of natural soda ash. Given their dominance in the forward integration to glass also, are they in a position wherein they can keep the soda ash prices lower and still benefit? So the lower soda ash prices are still benefiting them actually.
R Mukundan
So Mithil, I don’t understand the question. I’m not going to answer that in the question of a specific company, but generally I want to tell you that when input material prices go down for a downstream manufacturer, it is actually negative in terms of competitive advantage because this competition gets the raw material at a lower price so broadly. Let me leave that with you. I think that should give you where I think if you are a downstream product producer you would want the raw material actually for your competitors to be print high.
Unidentified Participant
The second question was on coal prices. We have risen from May so we have seen a sharp reduction in coal cost fuel cost this quarter. So can it possibly go up in the next quarters?
R Mukundan
We are constantly contracting and our numbers are not tendered very much up. I’ll cross check this number but as of now we think it is still biased towards.
operator
Thank you ladies and gentlemen. We will take that as our last question for today. I would now like to hand the conference over to R. Mukundan for closing comments. Over to you sir.
R Mukundan
Thank you everyone for joining the call today. While the market conditions remain tepid and challenging, our endeavors to excel in our operations and continue to focus on what we can do internally and we will ensure that we all our current capacities to come on stream are fully brought on stream focused on cost optimization and optimization of working capital. Next quarter we will be able to give a better update on market conditions as the picture becomes clearer. Thank you all and see you in Q2FY26.
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.