Stock Reco

In: Business and Management

Submitted By rahulbitm
Words 1316
Pages 6
Unnati Investment Management Research Group Management Development Institute Tata Chemicals Ltd.
Tata Chemicals Tata Chemicals was incorporated in 1939 after the acquisition of Okhamandal Salt Works Its products are divided into 3 categories Living essentials, Industry essentials and Farm essentials Presence in 4 continents Africa, Asia, Europe and North America It is the world’s second-largest producer of soda ash, leading manufacturer of soda ash in Africa, sodium

Buy (CMP=318.10)

carbonate, salt and sodium bicarbonate in Europe, and high quality soda ash through strategic acquisitions.
The company reported the results of Q1 2012 indicating an 18 % increase in revenues q-o-q and a 0.6 % increase in net profits q-o-q.

Segmental Break down of Revenue (FY-2010)

Geographical Break down of Revenue (FY-2010)

Soda Ash

1%
Asia

1% 7% 10%

18%
Complex Fertilizers

11%
America

38%

Urea Vaccum Salt

16% 72%

Europe Africa

Cement

26%

Others

INVESTMENT RATIONALE
Growing Capacity Across domains •Expansion of salt capacity: 200K TPA debottlenecking capacity at 180 crores on track and expected to commence operations by March 2012. •Expansion of soda ash capacity at GCIP: Tata Chemicals plans to spend more than $100 million to expand soda ash making capacity by 400,000 tonnes •Fertilizer unit at Gabon: Setting up of 1.3 million TPA Urea capacity expected to be commissioned within 36 months I-shakti Success: First national brand for pulses launched in 2010 in 4 popular varieties clocked sales of over 1000 tonnes in FY 2011. Currently present in 3 states - to be rolled out to over 12 states during FY2012 Complex fertilizers: Deal with Canpotex will help in steady and economical supply of potash which will increase profit margins EPM acquisition to boost consistent and efficient potash supplies for the fertilizer business Urea…...

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