TATACHEM - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 3.4
| Stock Code | TATACHEM | Market Cap | 19,072 Cr. | Current Price | 750 ₹ | High / Low | 1,027 ₹ |
| Stock P/E | 30.8 | Book Value | 758 ₹ | Dividend Yield | 1.47 % | ROCE | 4.18 % |
| ROE | 3.30 % | Face Value | 10.0 ₹ | DMA 50 | 730 ₹ | DMA 200 | 783 ₹ |
| Chg in FII Hold | -0.36 % | Chg in DII Hold | 0.43 % | PAT Qtr | 48.0 Cr. | PAT Prev Qtr | 85.3 Cr. |
| RSI | 52.1 | MACD | 8.46 | Volume | 4,07,820 | Avg Vol 1Wk | 7,15,322 |
| Low price | 580 ₹ | High price | 1,027 ₹ | PEG Ratio | -2.15 | Debt to equity | 0.18 |
| 52w Index | 37.9 % | Qtr Profit Var | -50.5 % | EPS | 23.8 ₹ | Industry PE | 19.7 |
📊 Core Financials
- Revenue & Profit: Quarterly PAT ₹48 Cr. vs ₹85.3 Cr. previous quarter, showing steep decline (-50.5%).
- Margins: ROE at 3.30% and ROCE at 4.18% reflect weak efficiency and profitability.
- Debt: Debt-to-equity ratio of 0.18 indicates low leverage, balance sheet is stable.
- Cash Flow: Stable due to low debt, but earnings volatility is a concern.
💹 Valuation Indicators
- P/E Ratio: 30.8 vs Industry PE of 19.7 — trades at a premium, suggesting overvaluation.
- P/B Ratio: Price ₹750 vs Book Value ₹758 → ~0.99x, fairly valued relative to assets.
- PEG Ratio: -2.15 indicates weak growth outlook.
- Intrinsic Value: Current price appears fairly valued but growth concerns limit upside.
⚗️ Business Model & Advantage
Tata Chemicals operates in chemicals, consumer products, and specialty materials. Its competitive advantage lies in diversified operations, strong brand backing from Tata Group, and global presence. However, profitability is modest and cyclical demand impacts earnings stability.
📈 Technicals & Entry Zone
- RSI at 52.1 indicates neutral momentum.
- MACD positive (8.46) suggests short-term bullishness.
- Entry Zone: Attractive accumulation around ₹700–₹730 range.
- Long-term Holding: Suitable for investors seeking exposure to chemicals and specialty materials, but valuation risks remain.
✅ Positive
- Low debt-to-equity ratio (0.18).
- DII holdings increased (+0.43%).
- Strong brand presence under Tata Group.
⚠️ Limitation
- Weak ROE (3.30%) and ROCE (4.18%).
- Quarterly PAT decline from ₹85.3 Cr. to ₹48 Cr.
- PEG ratio (-2.15) signals poor growth prospects.
📰 Company Negative News
- Profit variation negative (-50.5%).
- FII holdings declined (-0.36%).
🌟 Company Positive News
- DII holdings increased (+0.43%).
- Strong global presence in chemicals and consumer products.
- Fairly valued on P/B ratio (~0.99x).
🏭 Industry
Chemicals industry PE at 19.7 reflects moderate valuations. Demand is driven by industrial growth, consumer products, and specialty materials. However, cyclical risks and raw material costs remain challenges.
🔎 Conclusion
Tata Chemicals demonstrates stability with low debt and strong brand backing, but profitability is weak and valuations are stretched on P/E. Long-term investors may consider accumulating in the ₹700–₹730 range, aligning with industry demand while being cautious of earnings volatility.
For deeper insights, you could explore a peer comparison or an industry outlook to complement this analysis.