Tata Group Stock Declares Rs17.50/Share Dividend, Gets 'Neutral' Rating From Motilal Oswal

A leading brokerage firm, Motilal Oswal sees significant growth of nearly 13 per cent from the stock of Tata Chemicals Limited but has given it a neutral rating, with a target price. Tata Chemicals recently reported a strong Q4FY23 performance and declared a dividend.

As per the Motilal Oswal report, Tata Chemical's consolidated EBITDA grew 47 per cent, primarily led by higher realization per metric tonne in the US (up 38% YoY/25% QoQ) and the UK (up 54 per cent YoY/down 2 per cent QoQ). Consequently, EBITDA/MT improved in the US by 52% YoY to USD91
and in the UK by 6.9x YoY to GBP144, aided by cost moderation and high realization.

The brokerage feels that the soda ash demand-supply dynamic is expected to remain intact in the medium term, aided by the emergence of new applications, such as solar glass and lithium-ion batteries. However, increasing supply from China and fears of a global recession pose a risk to the demand-supply dynamic. Margins in the US and UK are expected to remain high in FY24; however, we believe margins will taper off from FY25 onward in the US market. Over FY22-25, we expect a revenue CAGR of 3% and estimate EBITDA/Adj. PAT to decline by 1 per cent/8 per cent

In terms of valuation, Motilal Oswal has suggested that "Factoring in a strong 4QFY23 performance in the US and the UK region, we raise our FY24/FY25 EBITDA estimates by 14 per cent/11 per cent. We reiterate our Neutral rating with a SoTP-based target price of Rs1,110 per share.

About Tata Chemicals
Tata Chemicals is a science-led company with a portfolio that covers basic and specialty chemistry products. The history of Tata Chemicals can be traced to the Okhamandal Salt Works set up in 1927.
It is a mid-cap company with a market capitalisation of Rs 24,442.59 crore.

Dividend Details
The board of directors has recommended a dividend of Rs 17.50 per share i.e. 175% for the financial year 2022-23 during its meeting held on May 3, 2023. The company did not share record date details.

Share price movement Tata Chemicals
The latest stock price of Tata Chemicals Limited is Rs 949.45 per share, which is down by 2.31 per cent over the previous day's closing. The 52-week high is at Rs 1,214.65 per share while the 52-week low is at Rs 773.90 per share. The share price has declined by 8.08 per cent in the last one year while over three years it has surged massively by nearly 241.47% per cent.

Disclaimer
The stocks have been picked from the brokerage report of Motilal Oswal. Greynium Information Technologies, the Author, and the respective Brokerage house are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to consult with certified experts before making any investment decision.