Tatva Chintan surges 4% as board to consider fund-raise on July 11

Anaylsts are not so bullish on the company as much of their product pipeline will take some time to show results.

Shares of Tatva Chintan Pharma Chem surged 4 percent in the early trade on July 7 after the company announced plans to consider a fund-raise in a board meeting on July 11.

The company will consider a proposal for raising funds by way of issuance of equity shares, qualified institutional placement, private placement, public issue, preferential issue or through any other permissible mode, the firm said in an exchange filing.

At 10.36 am, shares of Tatva Chintan Pharma Chem were trading at Rs 1,823 on the National Stock Exchange, up 3 percent from the previous close.

The company recorded a sharp margin contraction in the fourth quarter of FY23 to 13.07 percent from 22.32 percent a year ago.

The company's weak operating metrics have become a bottleneck in its growth path, as most analysts have turned bearish on its near-term prospects. Brokerage firm Nirmal Bang Institutional Equities, for instance, has downgraded the stock to "sell" with a target price of Rs 1,600, valued at 25 times FY25 earnings

While the management elaborated in detail on various products across segments (mainly pharmaceutical & agrochemical intermediates, and other specialty chemicals) and their development cycle along with client approvals, the brokerage firm believes that a large part of those new products would need at least 12-15 months to scale up commercially.

Disclaimer: The views and investment tips expressed by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.