Q3FY21 Result Update - Tata Chemicals - ICICI Direct

Tata Chemicals reported flat revenues to the tune of Rs. 2606 crore against our estimate of Rs. 2618 crore. The basic chemical segment revenue was down 1% YoY to Rs. 1987 crore while the same from speciality products was up 2% YoY to Rs. 618 crore. Higher growth from Magadi (up 30.5% YoY) along with India (up 7% YoY) & Europe (up 7% YoY) led growth in the basic chemical segment revenue. However, the same declined 14.9% YoY in the US market. Gross margins witnessed an improvement of 725 bps QoQ to 79.6%, leading EBITDA to beat our estimates. Further, control on other opex also helped a better operational performance. EBITDA remained flat at Rs. 472 crore against our estimate of Rs. 407 crore. PAT was up 10% YoY to Rs. 160.9 crore, assisted by lower tax rate (21% vs. 23% in Q3FY20).

Valuation & Outlook

We introduce FY23E estimates and roll over our valuations on FY23E. We value the company on SOTP basis and arrive a target price of Rs. 520 (earlier Rs. 490) including investment portfolio value. We maintain HOLD rating on the stock.

For details, click on the link below: https://www.icicidirect.com/mailimages/IDirect_TataChemical_Q3FY21.pdf

Shares of TATA CHEMICALS LTD. was last trading in BSE at Rs.475.45 as compared to the previous close of Rs. 489.8. The total number of shares traded during the day was 349091 in over 12034 trades.

The stock hit an intraday high of Rs. 503.8 and intraday low of 471.8. The net turnover during the day was Rs. 169816554.

Source : Equity Bulls

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