1
Please refer to important disclosures at the end of this report
1
1
Tata Chemicals (TCL) operates principally in industrial, agricultural and
consumer chemicals. The divestment of the Urea Business by Tata Chemicals to
Yara Fertilisers India for Rs. 2670cr in 2016 will strengthen its Balance Sheet and
will help to pursue growth potentials and opportunities in line with its strategic
directions. TCL is likely to witness increase in sales mainly in Soda ash and
Bicarbonate with better margins due to lower fuel cost. It will continue to focus on
expanding its portfolio of value added offerings for high-end applications. Going
ahead they will focus on consumer businesses and will launch products in the
atta and rice segments in FY18. It is also reportedly looking at other products like
wheat indigenous products and highly nutritious super foods.Tata Chemicals’
subsidiary Rallis continues to post higher operating profits on account of
improved operating margins. Management’s outlook is optimistic led by above
normal monsoon forecast in Kharif and expected recovery in global agrochem
demand. Margin expansion in seed business and enhanced capacity utilisation at
Dahej will spur further growth. TCL has been maintaining a healthy dividend
payout of 36.17%. It’s EBITDA margin has improved from ~11% in FY15 to
~20% in FY17. Further, the company has reduced debt from `7900cr as on
March 2016 to `5500cr as on March 2017 and cash flows has also improved
from `1215.33cr in FY12cr to `3530.92cr in FY17. Hence Buy.
BUY
CMP `665
1.3
Reuters Code
TTCH.NS
TTCH:IN
10
BSE Sensex
31,814
Nifty
9,980
Face Value (`)
Chemicals
Market Cap (` cr)
17,283
52 Week High / Low
687.9/445.5
Avg. Daily Volume
39,884
Vaibhav Agrawal
022 3935 7800 Ext: 6808
[email protected]gelbroking.com
Tata Chemicals Ltd
Others | Chemicals
Oct 05, 2017
2
Tata Chemicals Ltd |Chemicals
June 5, 2017
2
Research Team Tel: 022 - 39357800 E-mail: [email protected] Website: www.angelbroking.com
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Disclosure of Interest Statement Tata Chemicals
1. Financial interest of research analyst or Angel or his Associate or his relative No
2. Ownership of 1% or more of the stock by research analyst or Angel or associates or relatives No
3. Served as an officer, director or employee of the company covered under Research No
4. Broking relationship with company covered under Research No
Ratings (Based on expected returns Buy (> 15%) Accumulate (5% to 15%) Neutral (-5 to 5%)
over 12 months investment period): Reduce (-5% to -15%) Sell (< -15)