Prefer Tata Chemicals, says Rajen Shah

Rajen Shah, CIO of Angel Broking told CNBC-TV18, "Tata Chemicals is into soda ash business, so that is doing reasonably fine right now. It is into nitrogenous fertiliser, phosphatic fertiliser both are doing fine. It is in to agriculture input via its stake in Rallis India Ltd which is doing extremely well. So as far as the businesses of Tata Chemicals are concerned all of them are doing very well and we at Angel Broking are expecting approximatley Rs 30 kind of earnings for FY16 from the operations front.”

“If you see the investment portfolio of Tata Chemicals it should be valued currently at nothing less than Rs 5,000 crore. It owns share of Tata Sons beside Tata Global Beverage, Titan, Indian Hotels Company and all that,” he added.

“The operations front should report about Rs 30 earnings, so we are getting this company at 12.5 times. If you see today if Tata Sons were to be listed it would have easily come under the market cap of nothing less than about Rs 2,00,000 crore. It owns 73 percent stake in Tata Consultancy Services and TCS’ market cap is about Rs 5,00,000 crore. So that works around Rs 3,75,000 crore the value of their holding in Tata Consultancy Services, beside it owns stakes in Tata Motors, Tata Steel and various Tata companies,” he said.

“Since Tata Chemicals owns Rs 56 crore worth of share of Tata Sons we feel that the value of this Rs 56 crore if re-valued could be anything beyond Rs 3,000-3,500 crore. Beside other investment offers Rs 2,000 crore, the investment portfolio itself works out to about Rs 5,500 crore which is 60 percent of the companies current market cap.”