Buy Tata Chemicals; target of Rs 1345: ICICI Direct

ICICI Direct's research report on Tata Chemicals

Commencing operations in 1944, Tata Chemicals has come a long way to become one of the top five players in the global soda ash market. Under basic chemical, TCL offers soda ash, sodium bicarbonate, cement, salt, marine chemicals and crushed refined soda. Speciality chemical consists of solution towards agro chemical through Rallis and other specialty solutions such as nutritional products and HDS • Basic chemical forms 75% of overall revenue while the rest comes from speciality products.

Outlook

We maintain BUY on the back of 1) tighter soda ash supply scenario, 2) upbeat management commentary regarding demand and pricing and 3) the company’s ability to pass on the cost escalation via consistent price hikes. We value Tata Chemicals at SOTP valuation to arrive at a revised target price of Rs 1345/share (earlier Rs 1370/share).