Fundamental Analysis

TATA CHEMICALS

Ticker : 500770                                           
BUY: Rs 285.90                                         
Target: Rs 320

Tata Chemicals Limited (TCL) is a manufacturer of soda ash and sodium bicarbonate for diverse industries, such as glass, detergents, silicates, textiles and others. On a quarterly consolidated front, net sales grew marginally by 1.97 per cent in Q3FY20 to Rs 2,620.38 crore from Rs 2,569.81 crore in Q3FY19. The company reported an operating profit of Rs 535.35 crore in Q3FY20, increasing by 5.6 per cent from Rs 506.97 crore reported in Q3FY19. Net profit saw an impressive growth of 28.6 per cent, coming in at Rs 291.80 crore in Q3FY20 from Rs 226.90 crore in Q3FY19. TCL ventured into the silica, nutraceutical business with a capex of around Rs 500 crore and is expected to improve the return ratio profile ofthe overall group. Strong growth visibility from cathode active materials and TCL’s position in the entire chemistry should put the company in a favourable position in the long-run. Thus, we recommend a BUY.