Buy Tatva Chintan Pharma Chem; target of Rs 1,000: ICICI Securities

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ICICI Securitie`s research report on Tatva Chintan Pharma Chem

Tatva Chintan Pharma Chem’s (TATVA) performance showed signs of improvement in Q4FY25 on the revenue front, but lower gross profit marred profit recovery. TATVA is hopeful of a sharp recovery in FY26, as new products commercialise in PASC and SDA volume recovers. It anticipates underlying demand for critical SDA segment to improve, after the challenging FY25.

Outlook

In the PASC segment, agro-intermediates should see supplies commencing from H2FY26, which is expected to drive additional growth. Gross profit margins to improve as the company optimise processes, and new products achieve desired yields; further, operating leverage should aid faster growth in EBITDA/ PAT. We cut our FY26E/FY27E EBITDA estimates by 13%/17%, and lower our TP to INR 1,000 (vs. INR 1,220), based on a PE multiple of 25x FY27E (unchanged). Maintain BUY.

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