What makes analysts see an all-time high on this LIC-backed Tata group stock?

Tata Chemicals is a large cap company that closed with a market cap of ₹24,762.31 Cr on Wednesday. The company is the largest saltworks in Asia and ranks third and sixth globally in terms of soda ash and sodium bicarbonate production, respectively. Basic chemistry products and specialty products are the company's two operating verticals. The company's basic chemistry product line supplies essential supplies to many of the top brands in glass, detergent, pharmaceutical, biscuit production, bakeries and other sectors.

Tata Chemicals Q4 and FY23 result highlights

Consolidated revenue from operations for the firm in Q4FY23 was ₹4,407 Cr, up 26.60% YoY from ₹3,481 Cr in Q4FY22. Consolidated revenue from operations for FY23 was ₹16,789 Cr, up from ₹12,622 Cr in FY22. In Q4FY23, the company's consolidated net expenses were ₹3,809 Cr, up from ₹3,098 Cr in Q4FY22, while in FY23, they were ₹14,265 Cr, up from ₹11,426 Cr in FY22.

Tata Chemicals' consolidated net profit for the fourth quarter of FY23 was ₹709 Cr, up 61.87% year on year from ₹438 Cr in the same quarter last year. For the whole fiscal year, it was ₹2,317 Cr as opposed to ₹1,258 Cr in FY22. During Q4FY23, Tata Chemicals' consolidated EPS rose to Rs. 27.91 from Rs. 18.17 in Q4FY22.

The Board has recommended a dividend of ₹17.50 per share i.e. 175% for the financial year 2022-23 subject to the approval of the shareholders.

Tata Chemicals Shares

On Wednesday the shares of Tata Chemicals closed on the NSE at ₹971.90 apiece up by 0.29% from the previous close of ₹969.10. The stock touched a 52-week-high of ₹1,214.90 on (11-Oct-2022) and a 52-week-low of ₹773.35 on (01-Jul-2022). During Q4FY23, the company reported promoters shareholding of 37.98%, FIIs stake of 14.59%, DIIs stake of 19.77%, Govt stake of 0.03% and public stake of 27.64%. As per the shareholding pattern of Tata Chemicals for January to March 2023 quarter, insurance giant LIC held 1,05,26,071 fully paid up equity shares or 4.13% stake in the company.

Buy Tata Chemicals?

The research analysts of the brokerage firm Geojit Financial Serviceshave set a target price of Rs. 1,340 for Tata Chemicals on the back of long term growth in Soda Ash demand.

“TCL has been reporting solid performance consistently despite a challenging environment. We remain optimistic about continued soda ash demand across geographies, which will boost the topline. The ongoing global soda ash shortage will further improve realisations through heightened pricing. The management expects the positive momentum to continue in the near to short term and aims to leverage digitalisation for further growth. Hence, we reiterate our BUY rating on the stock, with a revised target price of Rs. 1,340 using a target multiple of 20x P/E on FY24E adj. EPS,” Geojit Financial Services stated in a note. 

Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.