Neutral Tata Chemicals; target of Rs 1250: Motilal Oswal

Motilal Oswal's research report on Tata Chemicals

Tata Chemicals (TTCH)’s 2QFY23 consolidated EBITDA missed our estimate due to planned plant shutdown taken by the company in TCNA (US) and the India region, resulting in a total volume loss of ~60KT. Barring that, operating performance in TCEHL (Europe) and TCAHL (Kenya) were strong with higher Soda Ash realization and improved EBITDA/MT. Globally, demand-supply scenario for Soda Ash has been buoyant and is expected to remain favorable in the near term. All plants across the industry are running at optimum utilization levels.

Outlook

Factoring in 2QFY23 performance, we largely maintain our FY23/FY24 EBITDA estimates. We reiterate our Neutral rating with an SoTP-based TP of INR1,250.