Tata Stock Surges 39.96% In 1-Week, Analysts Give Opinion On Buy Call Amid Attractive Valuation

Mid cap Tata Group stock from the chemicals sector, Tata Chemicals Ltd share gained 11.57% on March 8, 2024 to settle at Rs 1314.90 apiece. Tata Chemicals shares witnessed a stunning rally of 39.96% in last 1-week.

In last 5-years, Tata Chemicals stock surged over 428%. Earlier this month, Fitch revised outlook for Tata Chemicals as it affirmed Long-Term Foreign Currency Issuer Default Rating (IDR) at BB+ and revised the outlook on the rating to Stable from Positive. Check details below:

Tata Chemicals Shares Performance & Return: The 52-week high price of Tata Chemicals stock on BSE is Rs 1349.70 apiece and 52-week low price is Rs 922.20 apiece, respectively. The company has a market capitalisation of Rs 33,497.90 crore. Tata Chemicals shares surged 33% in last 1-month, soared 21% in last 6-months, and rallied 54% in last 2-years. In last 3-years, Tata Chemicals shares gained 76%.

Why Tata Chemicals Witnessed Sharp Rally: Recently, speculations have been rife that parent Tata Sons listing has been getting closer. Tata Chemicals reportedly has 3% equity stake in Tata Sons, holding company of various group firms. A Reserve Bank of India classification necessitates that Tata Sons be listed as an upper-layer NBFC by 2025. Meanwhile, Research firm Spark Capital stated its recent report that Tata Sons' market capitalisation could be at around Rs 8 lakh crore, barring holdco discounts. As per that calculation, Tata Chemicals' equity stake in Tata Sons could be worth as much as Rs 19,850 crore, said Spark Capital. The only realistic way to get exposure to the potential value unlocking of Tata Sons stake is through Tata Chemicals where the ownership of Tata Sons potentially amounts to 80 percent of the chemicals firm's valuation, added Spark Capital.

VLA Ambala Opines On Tata Chemicals: As per VLA Ambala, "we can expect target ranging from Rs 1500 to 21,00 in the next one month to max 24 months. Use any dip up to 1000 for averaging. It is a quality stock and view should be mid-term to long run. Now, if your view is only for swing trading (short term then use trailing at 1110) and can do averaging up to 1160."

The analyst said Tata Chemicals is a key player in soda ash and sodium bicarbonate manufacturing. The stock is presently positioned as a strong investment opportunity. With a discounted PE of 16.43, lower than its sector's PE of 25.35, Tata Chemicals offers attractive valuation. Investors taking part in this upward trend have been advised to implement trailing strategies to capitalize amid the ongoing surge as there is robust potential for more upward movement.

Axis Securities Views On Tata Chemicals: According to the analyst, "The stock has seen a very strong buying action to hit its all-time high trajectory. The upside momentum can increase further."

Tata Chemicals Financials: The company for Q3 financial year 2024 declared a decline of 60% in its net profit to Rs 158 crore year-on-year (YoY) amid lukewarm market demand across key segments and areas, said the company in its BSE filing dated February 5, 2024. The company's revenue for the December 2023 quarter too declined by over 10% to 3,370 crore YoY as against the revenue of 4148 crore an year ago in the corresponding quarter. Its EBITDA fell 41.2% YoY to Rs 542 crore for the quarter under consideration as margins fell to 14.5%.

About: Tata Chemicals is a science-led company with a portfolio that covers basic and specialty chemistry products. The story of the company is about harnessing the fruits of science for goals that go beyond business. The history of Tata Chemicals can be traced to the Okhamandal Salt Works set up in 1927, according to the official website.

Disclaimer: The stock has been picked from the brokerage report of Axis Securities and VLA Ambala. 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 check with certified experts before taking any investment decision.