Fairwealth SecuritiesPage 1
Priced on 12
Beta 0.890352Wk hi/lo 375.50/99.70Market cap, INR Crore 5234Shares in issue (mn.) 235.17Reuters
Share Holding Pattern (%)
Promoters 29.2FII 8.3Domestic Inst. & Corp Body 37.6Public & Others 25.3
CMP: 230 Target: 345
Investment Period: 1 year
We initiate a Buy call on Tata Chemicals with a 50% upsidepotential on the stock from thecurrent levels.Investment advice is based on very strong balance sheet, diversifiedbusinesses and strong Domestic Businessfor the company.
Tata Chemicals has increased its production of its Barbala facility from 864,600 tonnes to1.15 million tonnes. Urea production at the Barbalaplant has stabilized at over 3,500tonnes per day levels. The previous quarter saw the highest ever urea sales on the backof improved availability after debottlenecking the plant.Global Soda Ash Operations are running at 70-75% capacity due to sluggish globaldemand and 9% incentive to Chinese producers.
The company’s current news &future projects.
Tata Chemicals Ltd expects demand to ease to 3.5-4 percent in FY10 from 5percent last year as its overall growth rate comes down.(Source-Reuters , 8
Tata Chemicals would be investing 250 Crore FY10, 50 Crore in setting up acustomised fertiliser plant at Barbalain the northern state of Uttar Pradesh in 2010and the rest in normal maintenance of assets. (Source-Reuters, Mumbai 28
May). Capital Outlay has been trimmed down from 500 Crore to Rs. 250 Croredue to anticipation of lower demand sighting general Economic Conditions.
There will be increased Interest outgo as Company has started to repayloansforUSD 300 million raised for expansion.ProjectionsFY08FY09FY10EFY11EFY12E
Interest & Depreciation
PBT before EO and Min. interest
PBT after EO before MI
No. of shares
Source: Fairwealth Research Estimates