Buy Tatva Chintan Pharma Chem; target of Rs 1,850: ICICI Securities

ICICI Securities is bullish on Tatva Chintan Pharma Chem has recommended buy rating on the stock with a target price of Rs 1,850 in its research report dated July 25, 2024.

Broker Research

July 31, 2024 / 13:21 IST

Buy

26 Aug, 2025 12:21

Volume

Todays L/H

ICICI Securitie's research report on Tatva Chintan Pharma Chem

Company has three products approved from existing customer, and it anticipates scheduled Euro-7 demand to start showing from late CY25. It has taken price cut of 15-25% in SDA as raw material prices have dropped effective Apr’24. However, it has not changed its pricing formula. It expects SDA volume to grow 40% in FY25. SDA volume has increased 12% QoQ.

Outlook

Tatva Chintan Pharma Chem’s (TATVA) revenue grew 7.3% QoQ, but gross profit margin collapsed to just 45.9% (vs 57.8% in Q4FY24) due to high-cost inventory, particularly in SDA, where it had to take 15-20% price cut based on prevailing raw material prices. It expects some impact to flow into Q2FY25. TATVA has guided to grow volume by 40% in SDA, and total revenue by 25% with EBITDA margin of 22-25% in FY25. It anticipates some delay in agro-intermediate supplies due to weak demand; otherwise, it continues to build strong product pipeline across agro, pharma, electrolyte salt, polymer, metal extraction and other segments. We cut our FY25 / 26E EPS by 28%/ 19% (anticipating a gradual recovery), and trim TP to INR 1,500 (earlier INR 1,850), with an unchanged PE multiple of 28x. Maintain BUY.

For all recommendations report, click here