Tata Chemicals gains after brokerage maintains 'overweight' stance

Tata Chemicals rose 1.53% to Rs 985.80 after a foreign broker maintained 'overweight' stance on the stock with a target price of Rs 1278.

The target price implies about 30% upside from the ruling market price.

The brokerage expects market conditions to incrementally improve for the company and complement co-specific triggers to play out going forward. Stabilisation and slow pick-up in China demand should reverse downside pressure on regional prices.

Since October 2022 highs, the stock has corrected 20%. It is trading at 6x forward EV/EBITDA - near five-year average, the brokerage stated.

Tata Chemicals is a part of the Tata Group. Its business segments include basic chemistry products, salt making facility and specialty products.

Tata Chemicals reported a consolidated net profit (from continuing operations) of Rs 685 crore in Q2 FY23, steeply higher than Rs 248 crore posted in Q2 FY22. Revenue from operations jumped 40.2% to Rs 4,239 crore in quarter ended 30 September 2022 from Rs 3,022.63 crore recorded in Q2 FY22.

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