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Looking to invest in Tata Chemicals? Keeping a close eye on Tata Chemicals share price is essential for making informed investment decisions. As a key player in the chemical industry, Tata Chemicals share price reflects not only its financial performance but also market sentiments and industry trends. By monitoring Tata Chemicals share price regularly, investors can gauge the company’s growth trajectory, assess its valuation, and identify potential buying or selling opportunities. Whether you’re a seasoned investor or a newcomer to the stock market, understanding Tata Chemicals share price dynamics is crucial for optimizing your investment portfolio.
Table of Contents
Tata Chemicals Limited, an Indian multinational company, operates across the chemicals, crop protection, and specialty chemistry sectors. Based in Mumbai, it conducts business in India, Europe, North America, and Africa. As a division of the Tata Group, its stocks are traded on both the NSE and BSE. Additionally, Tata Chemicals owns Rallis India, a publicly traded subsidiary.
The company prides itself on having the third-largest soda ash production capacity in India, dating back to 1944 when Kapilram Vakil established the plant in Mithapur, Gujarat. Tata Chemicals expanded its reach by acquiring Brunner Mond in 2006, enhancing its presence in the UK, Kenya, and the US. Over time, with various acquisitions, its soda ash production capacity has grown to approximately 5.17 million tons.
In April 2010, Tata Chemicals acquired a 25% stake in an ammonia-urea fertilizer complex in Gabon. Once fully operational, this plant is expected to produce 2.2 billion tons of ammonia and 3.85 billion tons of urea daily. In 2016, Tata Chemicals sold its urea business to Yara India, a subsidiary of Yara International.
In 2019, Tata Group transferred Tata Chemicals’ branded food business to Tata Global Beverages (now Tata Consumer Products) in an exchange of shares. Then, in 2022, Tata Chemicals Europe, a subsidiary, pioneered the UK’s inaugural industrial-scale carbon capture and usage plant, capable of annually capturing 40,000 tonnes of carbon dioxide.
Tata Chemicals Ltd., listed since April 1, 1999, on both NSE and BSE, and part of Nifty 50 Index, showcases resilience and innovation in India’s stock market. Founded by the visionary Tata Group, Tata Chemicals Ltd. Pioneers’ chemistry for agriculture, nutrition, and materials, offering diverse solutions. Its inclusion in Nifty 50 highlights its performance and economic contribution.
Subsidiaries of Tata Chemicals Ltd.
- Rallis India
- Tata Chemical Europe
- Tata Chemical North American Inc
- Tata Consumer Products
- Magadi Soda Company
- Ncourage Social Enterprise Foundation
- Tata Chemicals International Pte Ltd
- Grow Energy Pty Ltd
- Homefield International Pvt ltd
- Bio Energy Venture – 1 (Mauritius) Pvt. Ltd
Share Holding Pattern of Tata Chemicals Ltd.
These figures represent significant actions taken by a company that directly influence shareholder value. They signify material changes within the company and have an impact on its stakeholders:
- Promoter Shareholding: 37.98%
- FII (Foreign Institutional Investor) Shareholding: 13.83%
- DII (Domestic Institutional Investor) Shareholding: 13.60%
- MF (Mutual Fund) Shareholding: 6.37%
- Retail and Others: 28.22%
Tata Chemicals Ltd. is a renowned name in the chemical industry, known for its strong market presence and diverse product portfolio. In this article, we will delve into the company’s financial performance by analyzing its key financial ratios over the past four fiscal years (March 2021 to March 2024). This comprehensive fundamental analysis aims to provide insights into the profitability, liquidity, solvency, efficiency, and valuation aspects of Tata Chemicals Ltd., aiding investors in making informed decisions.
Fundamental Analysis of Tata Chemicals Share Price | ||||
Ratio | March 2024 | March 2023 | March 2022 | March 2021 |
Profitability Ratio | ||||
Gross Profit Margin | 46.73% | 62.65% | 62.37% | 58.55% |
Net Profit Margin | 20.43 | 20.83 | 21.54 | 15.97 |
Return on Equity (ROE) | 4.78 | 6.42 | 5.22 | 3.61 |
Liquidity Ratio | ||||
Current Ratio | 1.05 | 1.66 | 1.23 | 1.49 |
Quick Ratio (Acid-Test Ratio) | 0.635 | 1.15 | 0.909 | 1.11 |
Solvency Ratio | ||||
Debt to Equity Ratio | 0.250 | 0.319 | 0.373 | 0.472 |
Interest Coverage Ratio | 2.44 | 7.42 | 5.76 | 2.66 |
Efficient Ratio | ||||
Inventory Turnover Ratio | 3.25 | 2.60 | 2.39 | 2.32 |
Account Receivable Turnover Ratio | 6.81 | 6.39 | 5.54 | 5.07 |
Valuation Ratio | ||||
Price to earning Ratio (P/E) | 102.75 | 10.69 | 19.74 | 74.73 |
Price to Book Ratio (P/B) | 1.70 | 1.26 | 1.36 | 1.34 |
Growth Ratio | ||||
Earning per Share (EPS) Growth | 10.52 | 90.95 | 49.37 | 10.06 |
Revenue Growth | 4,767.00 | 5,231.00 | 3,998.86 | 3,218.03 |
Profitability Ratio
Gross Profit Margin:
The Gross Profit Margin of Tata Chemicals Ltd. has shown significant fluctuation over the analysed period. In March 2021, the gross profit margin was 58.55%, which increased to 62.37% in March 2022, slightly improving to 62.65% in March 2023. However, there was a notable decline to 46.73% in March 2024. This drop could indicate increased production costs or reduced pricing power, affecting the company’s ability to maintain high profit margins.
Net Profit Margin:
The Net Profit Margin exhibited a relatively stable trend. It started at 15.97% in March 2021, climbed to 21.54% in March 2022, and then slightly decreased to 20.83% in March 2023, ending at 20.43% in March 2024. Despite minor variations, the net profit margin has remained robust, reflecting the company’s consistent ability to convert revenue into actual profit.
Return on Equity (ROE):
Return on Equity (ROE) measures the company’s efficiency in generating profits from shareholders’ equity. The ROE for Tata Chemicals Ltd. was 3.61% in March 2021, increased to 5.22% in March 2022, reached 6.42% in March 2023, but fell to 4.78% in March 2024. The decline in ROE indicates a potential reduction in profitability or an increase in equity base without a proportional increase in net income.
Liquidity Ratio
Current Ratio:
The Current Ratio assesses the company’s ability to meet short-term obligations with its current assets. Tata Chemicals Ltd.’s current ratio was 1.49 in March 2021, dropped to 1.23 in March 2022, improved to 1.66 in March 2023, but decreased again to 1.05 in March 2024. A current ratio above 1 indicates that the company can cover its short-term liabilities, but the declining trend suggests tightening liquidity conditions.
Quick Ratio (Acid-Test Ratio):
The Quick Ratio provides a more stringent measure of liquidity by excluding inventory from current assets. In March 2021, the quick ratio was 1.11, decreased to 0.909 in March 2022, improved to 1.15 in March 2023, but significantly dropped to 0.635 in March 2024. The sharp decline in the quick ratio points to potential difficulties in meeting short-term liabilities without relying on inventory sales.
Solvency Ratio
Debt to Equity Ratio:
The Debt to Equity Ratio indicates the proportion of debt financing relative to shareholders’ equity. Tata Chemicals Ltd. had a debt to equity ratio of 0.472 in March 2021, which gradually improved to 0.373 in March 2022, further to 0.319 in March 2023, and finally to 0.250 in March 2024. The declining debt to equity ratio suggests a strong effort to reduce debt and improve financial stability.
Interest Coverage Ratio:
The Interest Coverage Ratio measures the company’s ability to cover interest expenses with its earnings before interest and taxes (EBIT). The ratio was 2.66 in March 2021, significantly improved to 5.76 in March 2022, further to 7.42 in March 2023, but dropped to 2.44 in March 2024. The recent decline indicates a reduced ability to cover interest expenses, which could raise concerns about financial strain.
Efficiency Ratio
Inventory Turnover Ratio:
The Inventory Turnover Ratio reflects how efficiently a company manages its inventory. Tata Chemicals Ltd.’s inventory turnover ratio increased from 2.32 in March 2021 to 2.39 in March 2022, further to 2.60 in March 2023, and reached 3.25 in March 2024. The rising inventory turnover ratio indicates improved efficiency in managing and selling inventory.
Account Receivable Turnover Ratio:
The Account Receivable Turnover Ratio indicates how effectively the company collects receivables. The ratio was 5.07 in March 2021, increased to 5.54 in March 2022, improved further to 6.39 in March 2023, and reached 6.81 in March 2024. This upward trend suggests enhanced efficiency in credit management and collection processes.
Valuation Ratio
Price to Earning Ratio (P/E):
The Price to Earning (P/E) Ratio is a valuation metric that compares the company’s current share price to its earnings per share (EPS). Tata Chemicals Ltd.’s P/E ratio showed significant fluctuation: 74.73 in March 2021, dropped to 19.74 in March 2022, further to 10.69 in March 2023, and dramatically rose to 102.75 in March 2024. The recent surge in P/E ratio might indicate overvaluation or expectations of high future earnings growth.
Price to Book Ratio (P/B):
The Price to Book (P/B) Ratio compares the company’s market value to its book value. The P/B ratio remained relatively stable: 1.34 in March 2021, increased to 1.36 in March 2022, slightly decreased to 1.26 in March 2023, and rose to 1.70 in March 2024. The consistent P/B ratio suggests a balanced market perception of the company’s intrinsic value.
Growth Ratio
Earning per Share (EPS) Growth:
The Earning per Share (EPS) Growth reflects the company’s profitability on a per-share basis. Tata Chemicals Ltd. experienced varied EPS growth: 10.06 in March 2021, a substantial increase to 49.37 in March 2022, further surged to 90.95 in March 2023, but moderated to 10.52 in March 2024. The significant growth in EPS in recent years demonstrates strong profitability, although the growth rate has normalized.
Revenue Growth:
Revenue Growth provides insight into the company’s top-line expansion. Tata Chemicals Ltd.’s revenue grew from ₹3,218.03 crore in March 2021 to ₹3,998.86 crore in March 2022, further to ₹5,231.00 crore in March 2023, but slightly decreased to ₹4,767.00 crore in March 2024. Despite the recent dip, the overall trend indicates solid revenue growth over the years.
In conclusion, Tata Chemicals Ltd. has demonstrated mixed financial performance over the past four years. While the company has shown strong profitability and efficient management of inventory and receivables, it faces challenges in liquidity and interest coverage. The fluctuating P/E ratio and stable P/B ratio suggest varied market expectations and consistent intrinsic value perception. Investors should consider these factors, along with the company’s efforts to reduce debt and maintain robust revenue growth, when evaluating the potential for future investments in Tata Chemicals Ltd.
Technical Analysis of Tata Chemicals Share Price
Technical analysis of Tata Chemicals Share Price involves evaluating price movements and trading volumes to forecast future price movements. Technical analysis depends on charts and statistical indicators. analysts use various techniques, such as trend analysis, chart patterns, and technical indicators like moving averages or relative strength index (RSI), to identify potential buying or selling opportunities for Tata Chemicals Share Price. The main goal of technical analysis of Tata Chemicals Share Price is to predict future price movements based on historical data and market psychology, helping investors make informed decisions about when to enter or exit trades. So, bellow we are explaining Various techniques as of 15th May 2024 for technical analysis of Tata Chemicals Ltd.
Price Action
Price action and price level of Tata Chemicals Share Price | |||
Price action | Daily Timeframe | Weekly Timeframe | Monthly Timeframe |
Candlestick | Strong Bullish Continuous Candlestick pattern | Strong Bullish Candlestick pattern | Doji Candlestick is forming |
Chart Pattern | Descending Triangle Pattern | Descending Triangle Pattern | Strong consolidation Pattern |
Price Support Level | 1025-1050 | 1000-1020 | 900-930 |
Price Level | 1085 is Current Tata Chemicals Share Price | 52 weeks High 1349 | 52 weeks low 876.80 |
Understanding the Tata Chemicals share price dynamics is crucial for investors and traders aiming to capitalize on market movements. As of May 15th, 2024, Tata Chemicals Ltd. has shown distinct patterns across different timeframes. Analysis of Tata Chemicals Share Price delves into the price action and key price levels observed in daily, weekly, and monthly timeframes, providing a comprehensive view of the stock’s behavior.
Daily Timeframe Analysis
Candlestick Pattern:
In the daily timeframe, Tata Chemicals share price exhibits a strong bullish continuous candlestick pattern. This pattern indicates robust buying interest, pushing the price higher. Significantly, the stock has broken the resistance level at 1065, suggesting a potential shift in market sentiment from bearish to bullish. This breakout is a positive signal for traders, indicating that the stock might continue its upward trajectory.
Chart Pattern:
The daily Tata Chemicals Share Price chart also shows the activation of a descending triangle pattern. Historically, this pattern signifies a bearish trend; however, its recent breakout to the upside is noteworthy. Tata Chemicals share price has fallen almost 24% from its high, but the breakout suggests a potential reversal. The previous high level also represents a 52-week high, highlighting significant resistance that the stock has managed to overcome.
Price Support Level:
On the downside, the support level for Tata Chemicals share price lies between 1025 and 1050. This range is crucial for traders to watch, as it provides a safety net for the stock. If the price dips but stays above this support range, it could indicate a buying opportunity for investors anticipating a continuation of the upward trend.
Weekly Timeframe Analysis
Candlestick Pattern:
In the weekly timeframe, Tata Chemicals share price maintains a strong bullish candlestick pattern. This pattern shows the stock is attempting to reverse after forming a base. From a high of 1349, the share price underwent a correction, but the current bullish pattern suggests a possible reversal is underway.
Chart Pattern:
The weekly chart reveals a descending triangle pattern that is still forming. A critical observation here is that if the price breaks the 1050-1090 level, it would clearly indicate a reversal. Traders should keep a close watch on these levels, as a breakout could lead to substantial upward movement, confirming the reversal of the recent downtrend.
Price Support Level:
The support level in the weekly timeframe is slightly lower, ranging between 1000 and 1020. This support range is essential, as it signifies a strong foundation for the stock. A successful hold above this level can bolster investor confidence, paving the way for a sustained upward move.
Monthly Timeframe Analysis
Candlestick Pattern:
In the monthly timeframe, Tata Chemicals share price is forming a Doji candlestick. This pattern typically represents indecision in the market, suggesting that the stock is in a consolidation phase. Since August 2022, the share price has been consolidating within a range of 900 to 1180. The formation of the Doji indicates that the market is waiting for a significant move, and traders should be prepared for potential volatility once the consolidation phase ends.
Chart Pattern:
The monthly chart also highlights a strong consolidation pattern. This type of consolidation shows a lesser chance of the share price falling further. The prolonged range-bound movement suggests that the stock might be gearing up for a major breakout, and the direction of this breakout will be crucial for future price action.
Price Support Level:
In the monthly timeframe, the support level is the lowest among the three timeframes, ranging between 900 and 930. This long-term support is vital for investors, as it provides a strong base for the stock. A breach below this level could indicate significant bearish pressure, but as long as the stock remains above this support, the long-term outlook remains positive.
Price Levels
The current price level of 1085 places Tata Chemicals share price in a crucial position. It is significantly higher than the 52-week low but still below the recent high, indicating potential room for upward movement. The 52-week high of 1349 serves as a critical resistance level, and surpassing this would mark a significant bullish milestone.
The analysis of Tata Chemicals share price across daily, weekly, and monthly timeframes reveals a complex but promising picture. The strong bullish patterns in daily and weekly charts suggest potential upward movement, while the consolidation observed in the monthly timeframe indicates a period of market indecision. Key support levels across different timeframes provide a safety net, ensuring that the stock has a strong foundation. Investors and traders should closely monitor these levels and patterns, as they will play a crucial role in determining the future direction of Tata Chemicals share price.
Indicators Use for Technical Analysis
Bolinger Band (BB):
Bolinger Band Price level in Tata Chemicals Share Price | |||
| Upper Band | Median | Lower Band |
Bolinger Band | 1037 | 1091 | 1044 |
Understanding the Bollinger Band levels for Tata Chemicals share price provides valuable insights into potential price movements and market conditions. As of 15th May 2024, the Bollinger Bands indicate the following levels:
1037, where the share price is facing short-term resistance. This level acts as a potential ceiling, indicating that the stock may struggle to rise above this price in the immediate future.
1091, providing a key support level. The median level of the Bollinger Band often represents a significant moving average, suggesting that the share price may find stability around this point.
1044, which also serves as a support level. If the share price falls towards this level, it may encounter buying interest, helping to prevent further declines.
The current positioning within these Bollinger Bands suggests that Tata Chemicals share price is experiencing some resistance at the upper band while finding support at both the median and lower bands, indicating a balanced but cautious outlook for short-term traders and investors.
Moving Average (MA):
Moving Average price level in daily candlestick of Tata Chemicals Share Price | ||
Moving Average | 100 Day | 200 Day |
Simple Moving Average (SMA) | 1064 | 1038 |
Exponential Moving Average (EMA) | 1064.5 | 1044 |
Analyzing the moving average price levels for Tata Chemicals share price provides crucial insights into its potential support levels and market trends. As of 15th May 2024, the daily candlestick chart reveals the following key moving average levels
Simple Moving Average (SMA):
1064, indicating strong short-term support. This level acts as a significant floor, suggesting that the share price may find stability and buying interest around this mark.
1038, offering robust support in both the short term and medium term. This moving average is crucial for identifying longer-term trends and potential reversal points.
Exponential Moving Average (EMA):
1064.5, providing strong short-term support. The slight difference from the SMA indicates a similar level of support but is more responsive to recent price changes.
1044, serving as strong support in both the short term and medium term. This level is important for observing the stock’s momentum and potential trend shifts.
The positioning of these moving averages suggests that Tata Chemicals share price has significant support around these levels, helping to stabilize the stock and potentially indicating bullish trends in the near term.
Data Analysis
Open Interest Put Call Ratio of Tata Chemicals Ltd
Open Interest Put Call Ratio of Tata Chemicals Ltd | ||||
Expiry Date | Put Open Interest | Call Open Interest | PCR OI | Signal |
30/05/2024 | 3187.80 K | 6591.75 K | 0.484 | Bullish |
27/06/2024 | 439.45 K | 493.90 K | 0.890 | Bearish |
A PCR of 0.484 indicates that there are significantly more call options than put options. This low ratio suggests that traders are optimistic about the stock’s price increasing, indicating a bullish sentiment for Tata Chemicals share price leading up to this expiry date.
A PCR of 0.890, while closer to parity, still shows a higher number of call options compared to put options, but with less disparity. This higher ratio compared to the previous date suggests a more cautious outlook. The sentiment leans bearish, indicating traders might expect some downside risk or consolidation in the stock’s price as this expiry date approaches.
Volume Put Call Ratio of Tata Chemicals Ltd
Volume Put Call Ratio of Tata Chemicals Ltd | ||||
Expiry Date | Put Total Contracts | Call Total Contracts | PCR Volume | Signal |
30/05/2024 | 186.00 | 823.00 | 0.226 | Strong Bullish |
27/06/2024 | 84.00 | 37.00 | 2.27 | Strong Bearish |
A PCR volume of 0.226 indicates a significantly higher volume of call contracts compared to put contracts. This low ratio suggests strong bullish sentiment among traders, who expect the share price of Tata Chemicals to rise by this expiry date.
A PCR volume of 2.27 shows a much higher volume of put contracts compared to call contracts. This high ratio reflects strong bearish sentiment, indicating that traders are anticipating a decline in Tata Chemicals share price leading up to this expiry date.
Conclusion
Based on the comprehensive analysis of Tata Chemicals’ share price, both fundamental and technical factors reveal a mixed yet cautiously optimistic outlook. The company shows strong profitability and efficient management of inventory and receivables. However, challenges in liquidity and interest coverage, along with fluctuating valuation ratios, suggest a need for careful consideration.
Technically, the share price exhibits bullish patterns in the short term, with significant support levels around the current price. The Bollinger Bands and moving averages indicate robust support, while the Open Interest Put Call Ratio and Volume Put Call Ratio provide a bullish outlook for the near-term expiry.
For investors, Tata Chemicals appears to be a promising stock, especially given its strong support levels and bullish technical indicators. However, potential investors should remain vigilant about the liquidity and solvency challenges. It is advisable to consider a buy position at current levels while keeping an eye on the key support levels and market sentiment for potential adjustments.
FAQs
- What is the current share price of Tata Chemicals?
As of May 15, 2024, the current share price of Tata Chemicals is ₹1085.
- What factors influence the share price of Tata Chemicals?
The share price of Tata Chemicals is influenced by various factors including its financial performance, market conditions, industry trends, economic indicators, and investor sentiment.
- Is Tata Chemicals a good investment?
Tata Chemicals has shown strong profitability, efficient management, and solid revenue growth. However, it also faces challenges in liquidity and interest coverage. Potential investors should consider these factors and conduct thorough research or consult a financial advisor before investing.
- What is the 52-week high and low for Tata Chemicals’ share price?
The 52-week high for Tata Chemicals’ share price is ₹1349, and the 52-week low is ₹876.80.
- How does Tata Chemicals’ share price compare to its competitors?
Comparisons should be made based on industry benchmarks, financial performance, and market conditions. It’s advisable to look at detailed reports and analyses to understand how Tata Chemicals stands relative to its competitors.
- What is the shareholding pattern of Tata Chemicals?
The shareholding pattern as of the latest update is: Promoter Shareholding: 37.98%, FII: 13.83%, DII: 13.60%, Mutual Funds: 6.37%, and Retail and Others: 28.22%.
- How does Tata Chemicals’ profitability look over the past few years?
Tata Chemicals has shown fluctuating profitability with gross profit margins ranging from 46.73% to 62.65% and net profit margins remaining relatively stable around 20% over the past few years.
- What are the key support and resistance levels for Tata Chemicals’ share price?
Key support levels are 1025-1050 in the daily timeframe, 1000-1020 in the weekly timeframe, and 900-930 in the monthly timeframe. The resistance level is around 1065 in the daily timeframe.
- What technical indicators are used to analyse Tata Chemicals’ share price?
Common technical indicators used include candlestick patterns, chart patterns like descending triangles, Bollinger Bands, Simple and Exponential Moving Averages (SMA and EMA), and Put Call Ratios (PCR).
- What is the Put Call Ratio (PCR) indicating for Tata Chemicals?
As of the latest data, a PCR of 0.484 for the expiry on May 30, 2024, indicates bullish sentiment, while a PCR of 0.890 for the expiry on June 27, 2024, suggests a more cautious, bearish outlook. The PCR volume for May 30 is 0.226 (strong bullish), and for June 27 is 2.27 (strong bearish).
