Tata Chemicals - Q2FY21 Result Update - ICICI Securities

Tata Chemicals reported a fall in revenue of 5.7% YoY to Rs. 2609 crore, largely dragged by poor soda ash sales volumes from Magadi (down 31% YoY) along with North America (down 19.8% YoY). Revenue from basic chemical fell 10% YoY to Rs. 1839 crore. In terms of geographies, India business basic chemical revenue remained at Rs. 699.7 crore (up 1% YoY), while the same from North America, UK and Magadi was at Rs. 711 crore (down 20% YoY), Rs. 337 crore (flat growth) & Rs. 91 crore (down 35% YoY). Lower gross margins (down 443 bps YoY) owing to higher input cost along with higher opex dragged OPM, which contracted 546 bps YoY to 14.8% resulting in EBITDA de growth of 31% YoY to Rs. 386 crore. OPM from basic chemical segment contracted 719 bps YoY to 15.2% while the same from speciality chemical was down 29 bps YoY to 14%. PAT was down 80% YoY to Rs. 70.5 crore, impacted by subdued operational performance along with higher tax rate (30% vs. 6%) and lower other income (down 26% YoY).

Valuation & Outlook

We value the company on an SOTP basis and arrive at a target price of Rs. 305 including the investment portfolio value. We have a HOLD recommendation on the stock.

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_TataChemical_Q2FY21.pdf

Shares of TATA CHEMICALS LTD. was last trading in BSE at Rs.320.5 as compared to the previous close of Rs. 325.6. The total number of shares traded during the day was 151001 in over 4058 trades.

The stock hit an intraday high of Rs. 325.55 and intraday low of 312.35. The net turnover during the day was Rs. 48260077.

Source : Equity Bulls

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