Please refer to important disclosures at the end of this report
Tata Chemicals is a global chemicals company serving the needs of industry,
consumers and the agricultural sector. The Company manufactures
inorganic chemicals, consumer products, crop protection and agriculture
inputs, and nutritional solutions. The company has always performed well
and maintained consistency with a compounded annual profit growth of
25.2% for 5 years ended FY2019.
The soda ash and soda bicarb are cash-cow products for the company. Tata
Chemical is coming up with capacity expansion for soda ash, soda bicarb
and cement business, which is expected to get entirely commissioned by the
end of FY22. TCL ventured into the silica, nutraceutical business with a capex
of ~`500 crore. Apart from this, strong growth visibility from cathode active
material and Tata Chemical’s position in the entire chemistry would put the
company in a favourable position in the long run. These factors if run
successfully, can bring down the valuations further which is already lower
when compared to peers.
On the financial health front, the company is bringing down its debt
dependence year after year. AT the end of FY19, debt-equity ratio came
down to 0.5x from 1.3x in FY14. Currently, the stock trades at 15.5x of its
earnings and delivers 11% RoE. The company also pays dividend of ~30%
on an average. With concrete business and attractive returns, we recommend
BUY on the stock.
CMP `736
Reuters Code
BSE Sensex
Face Value (`)
Market Cap (` cr)
52 Week High / Low
Avg. Daily Volume
Jaikishan Parmar
022 3935 7600 Ext: 6810
Tata Chemicals Ltd
Others | Chemicals
Feb 04, 2020
Tata Chemicals| Chemicals
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Disclosure of Interest Statement Tata Chemicals
1. Financial interest of research analyst or Angel or his Associate or his relative No
2. Ownership of 1% or more of the stock by research analyst or Angel or associates or relatives No
3. Served as an officer, director or employee of the company covered under Research No
4. Broking relationship with company covered under Research No
Ratings (Based on expected returns Buy (> 15%) Accumulate (5% to 15%) Neutral (-5 to 5%)
over 12 months investment period): Reduce (-5% to -15%) Sell (< -15)