Buy Tata Chemicals, target price Rs 1170: Anand Rathi

Anand Rathi has buy call on Tata Chemicals with a target price of Rs 1170. The current market price of Tata Chemicals Ltd. is Rs 975. Time period given by analyst is one year when Tata Chemicals Ltd. price can reach defined target.

Tata Chemicals Ltd., incorporated in the year 1939, is a Mid Cap company (having a market cap of Rs 24785.24 Crore) operating in Chemicals sector.

Tata Chemicals Ltd. key Products/Revenue Segments include Salt, Others, Refined Sodium Bicarbonate and Specialty Chemicals for the year ending 31-Mar-2021.



Financials
For the quarter ended 31-03-2022, the company reported a Consolidated Total Income of Rs 3586.91 Crore, up 12.77 % from last quarter Total Income of Rs 3180.66 Crore and up 32.81 % from last year same quarter Total Income of Rs 2700.72 Crore. Company reported net profit after tax of Rs 421.41 Crore in latest quarter.

Investment Rationale
The brokerage believes the company will grow its revenue by 13% CAGR over the next two years - driven by capacity expansion and recovery in economic activities. Also, it believes the company will maintain its profit margin with focus on cost reduction, maximizing plant output and reduction of international debt. The company is trading at 19.6x its FY22 earnings and 17.4x its FY23E earnings. It initiates coverage on TATACHEM with a BUY rating and a target price of ₹1,170 per share.

Promoter/FII Holdings
Promoters held 37.98 per cent stake in the company as of 31-Mar-2022, while FIIs owned 13.62 per cent, DIIs 19.9 per cent.