Shares of Tata Group’s chemical and technology services branches, Tata Chemicals and Tata Elxsi have excellently performed by generating within the period of one year. Tata Elxsi is one of the world’s best design and tech providers for product engineering and solutions while Tata Chemicals is a leading chemical entity in India, that works with soda ash, soda bicarbonate, cement, salt and other products.
The multi-bagger returns from Tata Elxsi shares have witnessed a sudden rise of 130% this year (year-to-date or YTD) against the 300% in the previous year. Whereas, Tata Chemicals stock experienced a massive jump of over 75% in 2021 comparatively 180% from the past year.
By the June quarter, Tata Chemicals had an enormous jump in consolidated net profit of ₹342 crore backed by a rebound in soda ash volumes supplied in the US and India. The company’s accounted a consolidated net profit of ₹74 during the year-ago quarter. Its operational income saw a rise by 27% to ₹2,977 crore from ₹2,348 crore in the year-ago period.
”In the last six months, TTCH has rallied ~50% on the back of the PLI incentive announced by the GoI for the EV Battery business. TTCH intends to enter into EV Cell manufacturing, but its plans are yet to be finalized,” Motilal Oswal added on an official note on Monday. About the performance degree in Q1FY22, a quicker volume recovery capacity with an improved profitability ratio in IMACID (JV of TTCH to manufacturer phosphoric acid), Motilal has significantly raised the company’s FY22E PAT roughly by 54% by ascertaining its neutral rating with a target price of ₹810 per share.
“Execution risk in the Energy Science business persists and compounding it is the risk of margin pressure due to increasing RM prices, particularly energy cost in Soda Ash, which poses a near term risk”, the brokerage averred.
The design and technology services provider Tata Elxsi’s net profit surged by 64% to ₹113.4 crore in the June 2021 quarter from ₹68.9 crore year-on-year basis (YoY). The company’s revenue from operations witnessed an increase of 39% to ₹558.3 crore for the announced quarter from ₹400.5 crore for the same period in the past year.