Buy Tata Chemicals; target of Rs 381: Motilal Oswal

Motilal Oswal's research report on Tata Chemicals

Tata Chemicals' (TTCH) operating performance was muted across geographies (barring Europe). This was primarily led by North America and India, where EBITDA declined 48% and 40% respectively. The Soda Ash segment's performance was impacted by reduction in demand from the end user industry (largely for flat and container glass). Factoring in the miss to our estimates (due to one-time cost) and weak end-user industry demand scenario, we cut our EBITDA estimates by 6% for FY21 while maintaining it for FY22E. We arrive at an SOTP-based TP of INR381. Maintain Buy.

Outlook

Factoring in the miss to our estimates (due to one-time cost) and weak end-user industry demand scenario, we cut our EBITDA estimates by 6% for FY21 while maintaining it for FY22E. We arrive at an SOTP-based TP of INR381. Maintain Buy.