TATACHEM - Fundamental Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Fundamental Rating: 3.2

📊 Core Financials Analysis

Revenue & Profitability

Recent PAT of ₹252 Cr. shows a strong rebound from the previous quarter’s loss (₹-17.4 Cr.), indicating operational recovery.

However, ROE (1.2%) and ROCE (3.96%) are significantly below industry standards, suggesting inefficient capital utilization.

Margins & Returns

Low return metrics imply weak profitability despite scale.

EPS of ₹13.2 is modest for a ₹1,000 stock price.

Debt & Liquidity

Debt-to-equity ratio of 0.33 is healthy and manageable.

No major red flags on solvency, but cash flow data would be needed for deeper insight.

📉 Valuation Indicators

Metric Value Insight

P/E Ratio 55.3 Overvalued vs. industry PE of 27.2

P/B Ratio ~1.18 Fairly valued on book basis

PEG Ratio -1.38 Negative PEG suggests earnings decline or unreliable growth forecast

Intrinsic Value Lower than CMP Based on low ROE and high P/E

🏭 Business Model & Competitive Advantage

Business Model: Tata Chemicals operates in basic and specialty chemicals, with exposure to global markets and agri-inputs.

Competitive Edge: Strong brand under Tata Group, but lacks pricing power and margin resilience compared to peers.

Challenges: Low profitability, high valuation, and weak return metrics limit its attractiveness.

📌 Entry Zone & Investment Guidance

Entry Zone: ₹850–₹900 range could offer better risk-reward, especially near 200 DMA (₹940) and 50 DMA (₹923).

Long-Term View

Hold only if expecting turnaround in profitability or strategic shifts.

Not ideal for aggressive growth investors; better suited for conservative portfolios seeking stability.

Would you like a comparison with peers like Deepak Nitrite or UPL to see how Tata Chemicals stacks up?

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