Motilal Oswal Financial Services neutral on Tata Chemicals, target price: Rs 1110

Motilal Oswal Financial Services has neutral call on Tata Chemicals with a target price of Rs 1110. The current market price of Tata Chemicals is Rs 959.45.

Tata Chemicals, incorporated in the year 1939, is a Mid Cap company (having a market cap of Rs 24443.86 Crore) operating in Chemicals sector.

Tata Chemicals key Products/Revenue Segments include Salt, Others, Refined Sodium Bicarbonate and Specialty Chemicals for the year ending 31-Mar-2022.


Financials
For the quarter ended 31-03-2023, the company has reported a Consolidated Total Income of Rs 4482.00 Crore, up 7.10 % from last quarter Total Income of Rs 4185.00 Crore and up 24.95 % from last year same quarter Total Income of Rs 3586.91 Crore. Company has reported net profit after tax of Rs 679.00 Crore in latest quarter.

The company’s top management includes Mr.Ratan N Tata, Ms.Vibha Paul Rishi, Mr.K B S Anand, Dr.C V Natraj, Mr.Rajiv Dube, Mr.S Padmanabhan, Mr.Zarir Langrana, Mr.R Mukundan, Mr.N Chandrasekaran, Mrs.Padmini Khare Kaicker. Company has B S R & Co. LLP as its auditors. As on 31-03-2023, the company has a total of 25 Crore shares outstanding.

Investment Rationale
The soda ash demand-supply dynamic is expected to remain intact in the medium term, aided by the emergence of new applications, such as solar glass and lithium-ion batteries. However, increasing supply from China and fears of a global recession pose a risk to the demand-supply dynamic.

Factoring in a strong 4QFY23 performance in the US and the UK region, the brokerage raises its FY24/FY25 EBITDA estimates by 14%/11%.

Promoter/FII Holdings
Promoters held 37.98 per cent stake in the company as of 31-Mar-2023, while FIIs owned 14.59 per cent, DIIs 19.39 per cent.