ICICI Direct puts`Outperformer`rating on Tata Chemicals
ICICI Direct puts`Outperformer`rating on Tata Chemicals ICICI Direct gives `Outperformer` rating to Tata Chemicals. CMP Rs 276 ,Target Price Rs 374. The acquisition of Brunner Mond in Aug 2006 propelled Tata Chemicals (TCL) into the league of global soda ash majors. The Brunner Mond Group has manufacturing facilities in the UK, the Netherlands and Kenya. The capacity of the Magadi plant in Kenya has been doubled from 3.5 lakh tons to 7 lakh tons. The capacities of the company`s Indian plants are also improving on account of de-bottlenecking initiatives. ICICI Direct expects traction in capacity utilization and benefits of de-bottlenecking to start kicking in FY09E onwards and revised its EPS estimates for FY08E upwards by 8% to Rs 29.78. TCL reported 55% growth in consolidated net profit to Rs 1373.8 million, despite 6% decline in consolidated net sales during the quarter ended Jun. 30, 2007 (Q1FY08). Revenues from fertilizers declined 17% y-o-y due to fall in volumes, which is expected to recover in the coming quarters. Urea sales volumes declined marginally 2%, while that of phosphatic fertilizers declined 44%. ICICI Direct revised its FY08 EPS estimates upwards by 8% to Rs 29.78. It expects EPS to grow at a CAGR of 18% over FY07-10E to Rs 38.57.
*
