FINANCE CONTINUOUS ASSESSMENT 1 (Group Assignment)

Manveen kaur, 12012084, Roll No. RDE564A20

Tata Chemicals Ltd is a global company with interests in businesses that focus on LIFE - living
industrial and farming essentials. Tata Chemicals currently is the world's third largest producer of soda
ash with manufacturing facilities in Asia Europe Africa and North America. Tata Chemicals is the
world's third largest producer of sodium bicarbonate which has applications that range from food to
pharmaceuticals to air pollution control. Tata Chemicals is the pioneer and market leader in India's
branded Iodised salt segment.

News 1

Tata Chemicals surges 9% on strong June quarter results

The performance for the quarter was largely led by improved soda ash realisations across all
geographies, which led strong top line growth for the quarter.

Analysis
• Shares of Tata Chemicals burst 9% to Rs 1,042.55 in intraday trade on BSE on Wednesday 23rd Aug
after the company reported a strong 87% year-on-year rise in consolidated profit after tax (PAT).
• Tata Chemicals said operating results reflected improved realisation, effective cost management and
optimal capacity utilisation against challenging market conditions and rising input and energy costs.
• The growth of basic chemicals is mainly due to the vigorous promotion of soda ash in various
regions.
• The global demand environment for the company’s products and applications continues to improve.
• Management said that while this positive momentum is expected to continue in short to medium term,
the environment on the input side, especially energy, remains at a high level, coupled with ongoing
logistical challenges in the market.

Impact
• Since, there is some capacity termination at China along with no major capacity addition of soda ash
across the globe, we expect soda ash market can remain buoyant.
• On the other side, any slowdown in the construction demand owing to recessionary fear can put
pressure on the demand environment of soda ash and thereby its prices in short term.
• This can impede growth of Tata Chemicals owing to high base in the coming quarters.
• The performance for the quarter was largely led by improved soda ash realisations across all
geographies, which led strong top line growth for the quarter.
• Better growth from solar panel to aid demand for glass industry and thereby soda ash

News 2

Tata Chemicals has no EV plant plan, lines up Rs 5,000-

crore capex
Tata Chemicals' consolidated turnover for financial year 2021-22 (FY22) grew 24 per cent to Rs 12,622
crore over the previous year

Analysis
• Tata Chemicals will not set up a battery plant for electric vehicles (EVs), Tata group Chairman N
Chandrasekaran said at the company’s eighty-third annual general meeting.
• The importance would be on expanding its current businesses for which the company, the world’s
third-largest soda-ash maker, would invest Rs 5,000 crore in capital expenditure (capex) in the next
few years.
• Tata Chemicals’ consolidated turnover for financial year 2021-22 (FY22) grew 24 per cent to Rs
12,622 crore over the previous year.
• The company reported an over threefold growth in profit after tax in FY22 to Rs 1,400 crore, its
annual report shows.
• Chandrasekaran said Tata Chemicals, part of the $103-billion Tata group, would continue to provide
its expertise to group companies, including Tata Motors, as far as lithium carbonate, an important
component in EV batteries, was concerned.

Impact
• the world’s third-largest soda-ash maker, would invest Rs 5,000 crore in capital expenditure (capex)
in the next few years.
• Tata group will continue to provide lithium carbonate battery as it is an important component in EV
batteries.
• Shareholders suggest to shift to green energy and mobility to drive home the point for an EV battery
unit at Tata chemicals.
• The EV ecosystem under Tata Motors has a number of companies from the Tata group as a part of it.
This includes Tata Chemicals, Tata Power, Tata Auto-comp, and Tata Motors Finance, among others
• Continue to leverage group companies as part of the initiative.
• Tata Chemicals would bring a sharper focus on sustainability by reducing 30 per cent of its carbon
emissions by 2030 and ensuring circularity of feedstock, low-energy intensity, and zero effluents.
• Tata Chemicals is also expanding its soda ash capacity at its Mithapur plant in Gujarat, while new
salt capacities will commence in the second half of FY23.

Findings of News 1 & 2

• Tata Chemical share price today jumped ₹68.40 per equity share — logging near 9 per cent intraday
 gain in the stock market opening bell (Tata Chemicals surges 9% on strong June quarter results)
• This sharp rise in Tata Chemical shares is due to the strong FY22 results in which the company has
reported multi-fold rise in profitability..
• Rise in profitability in June 2021 quarter of the company is due to the increase in soda ash business,
which is expected to remain on the higher side in near future as well.
• Most importantly, this rise in profit is due to the rise in its soda ash business, which is expected to
continue going northward as the product is mainly used in electric vehicle industry and in coming
days its demand is expected to further go up.
• Since, soda ash is a major product of Tata Chemicals, bulls are favouring this stock for the last one
year.
• Better growth from solar panel to aid demand for glass industry and thereby soda ash
• Soda ash price hike taken to the tune of | 2000/tonne in April 2022
• Mithapur plant expansion is moving as per schedule. Total | 2700 crore
• worth of capex is ongoing to expand capacity across soda ash, bicarb, salt
• businesses. The capex is expected to be commissioned by March 2024.
•

Revenue -
Increasing
year by year
Mrinalika Handa, 12011084, Roll No. RDE564A17

NEWS1 Robust demand to catalyse Tata Chemicals growth

Analysis
• This news is related to the investment decision of Tata Chemicals as they want to expand their
business. Tata Chemicals is the world’s third largest soda ash producer.
• As Tata Chemicals had the muted revenue growth and was having the falling profits from the past
five years but now over the past few quarters the earnings of the company have been improved as
they followed the tighter supply of the chemical used across various sectors including glass,
detergents, construction, and pharma.
• The company has the ambition to increase its presence in specialty chemicals, the basic chemicals
segment, which forms 75-80 per cent of the revenue, will continue to influence the financials in the
medium term. The company’s revenue growth increased by 24 percent in FY22. In the June quarter it
increased by 34 percent by the soda ash business resulting in a two-fold jump in net profit.
• The management stated that despite higher prices, the demand was robust especially from the glass
sector driven by its use in solar panels and from detergent manufacturers.
• It will incur Rs 2,000 crore capital expenditure (capex) over the next five years, which will include
30-40 per cent increase in the basic chemicals capacity and five times capex in its specialty chemical
product – silica.
 REVENUE OF TATA CHEMICALS

Impact
• The impact of the news is positive as the company increased revenue growth by 24 percent in FY22
and in the June quarter it increased by 34 percent.
• Tata Chemicals invested in the speciality chemicals and the basic segment chemicals to improve their
earnings and this decision turned out to be positive for the company. Analysts have upgraded their
earnings estimates by 12-15 per cent.
• For FY23, revenue is expected to grow by 40-45 per cent earnings by 70-75 per cent. Tata Chemicals
has manufacturing plants in India, US, UK and Kenya.
• The company has announced a second phase of capacity expansion. And due to this decision our
country’s economy has also increased to some extent. As we can see from the above chart that the
company in 2018 was having a revenue of about 10269 crores that increased to 12622 crores in 2022.

NEWS 2 - Dividend decision of Tata Chemicals

Analysis
• This news is about the dividend decision of Tata Chemicals. As we can see that For the year ending
March 2022 Tata Chemicals has declared an equity dividend of 125.00% amounting to Rs 12.5 per
share.
• At the current share price of Rs 1132.40 this results in a dividend yield of 1.1%.
• The company has a good dividend track report and has consistently declared dividends for the last 5
years.
• As we can see from the above chart, the dividend(Rs) of the company lies from 10.00-12.50 for all
the final types of dividend.
• But we can also observe that the company is also having the record of a special type of dividend(Rs)
that is 2.50 in 2015, one more special type of dividend is there that is in 2018 with the dividend(Rs)
11.00. At Wednesday’s closing price of Rs 1,094.4, the stock was traded at a forward price-earnings
multiple of 11.8.
• The stock has gained nearly 23 per cent over the past month following brighter prospects.

Impact
• The impact of news is positive, over the past few quarters the earnings of the company have been
improved as they followed the tighter supply of the chemical used across various sectors.
• The dividend track of the company is also good till now and may increase in the upcoming years.
• We can see that the company is expanding in the chemicals sector and trying to bring more and more
improvements in their company. And I have also observed that the revenue increased and the
earnings and the profit also increased as well.

Findings of News 1 & 2

• I observed from the news that Tata Chemicals company was having muted revenue growth and
falling profits from the last 5 years so they did the planning to improve the earnings as well as the
profits of the company.
• They made the investment in the speciality and in the basic chemical sector as well to catalyse their
growth.
• This decision taken by the company comes out to be positive as the revenue growth increased and net
profit also increased as well. Secondly, the dividend track is also good and consistent, the company is
providing a similar dividend that ranges from 10.00-12.50. And it is predicted that For FY23,
revenue is expected to grow by 40-45 per cent and earnings by 70-75 per cent.
Karuna, 12011234, Roll No. RDE564A18

News 1
Tata Chemicals hits new high; surges 38% in one month on healthy
outlook
RISE IN TATA CHEMICALS SHARE
On August 12,2022 Shares of Tata Chemicals hit a new high rise of Rs 1,182.40 after they rallied 6 per
cent on the BSE. The company reported a strong 87 per cent year-on-year (YoY) jump in its
consolidated profit after tax (PAT) at Rs 641 crore in the June quarter (Q1FY23). Green Chemistry and
Green applications will continue to be at the heart of our growth of the company. Tata Chemicals is
well positioned and all set to increase and continue its growth journey in FY 2022-23. The Company’s
earnings before interest, taxes, depreciation, and amortization margins for the quarter rose 520 bps to
25.4 percent (highest in the history) due to lower power & fuel and freight cost. Tata Chemical’s
income generated from operations grew 34 percent YoY at Rs 3,995 crore in Q1FY23 as compared to
Rs 2,978 crore in Q1FY22. In the past one month, the market price of Tata Chemicals has appreciated
by 38 per cent after the company reported better-than-expected earnings for the quarter ended June
2022.

GRAPH SHOWING INCREASE IN TATA CHEMICALS SHARES IN LAST ONE MONTH: -

Impact
Tata Chemicals' consolidated Profit After Tax from continuing operations for the June quarter surged
nearly two-fold YoY to around Rs 641 crore due to better material margins, lower other expenses, and
reduced employee expenses as a percentage of sales. The company’s shares are going up because this
company is one of the leading brands for many industries which includes glass, detergents, pharma,
food, animal feed and other industries. Due to increase in the share rate company’s income from
operations has increased 34 percent. If the demand for company’s product will keep on increasing then
the company will be expected to remain on a growth path in India as well as around the world. As the
demand for Soda Ash is increasing day by day that’s why the demand for the company’s share hit a
new rise.
Findings
• Tata Chemicals growth is largely led by strong realisations of soda ash across all geographies as
increase in demand for solar glass and lithium carbonate remain on a growth path in India as well as
around the world
• Tata Chemicals operating performance reflects improved realisations, efficient cost management and
optimum capacity utilization in challenging market conditions, and in the context of rising input and
energy costs.
• The major reason behind increase in shares of Tata Chemicals is that the company is a global major
in soda ash and sodium bicarbonate with manufacturing facilities in India, US, UK and Kenya.
• Tata Chemicals has 3rd market position in Soda Ash and 6th in Sodium bicarbonate.
• Tata Chemicals is earning high rate of shares because the company's product portfolio provides key
ingredients to many of the world's leading brands for glass, detergents, pharma, food, animal feed
and other industries.
• The increase in global demand for Tata Chemical’s products make a positive impact on Company’s
growth rate their products and their applications.

News 2
Tata Chemicals tops F&O gainers list, climbs more than 13% after
quarterly results
On August 9 Tata Chemicals share price topped the list of F&O gainers, rising more than 13 percent on
the back of healthy earnings in the June quarter. The Company got a massive 87 percent year-on-year
growth in consolidated profit at Rs 641 crore despite significantly higher freight & forwarding charges
as well as power & fuel cost. The stock of the company was 12.75 percent when it’s trading at 1.079.
The profitability of the company was driven largely by a healthy growth in operating performance and
topline. On the operating front, its EBITDA grew 69 percent on-year to Rs 1,015 crore and margin
expanded 522 bps to 25.4 percent during the quarter ended June 2022. The revenue from operations
during June FY23 quarter came in at Rs 3,995 crore, rising 34 percent over Rs 2,978 crore in the year-
ago period.
GRAPH SHOWING TATA CHEMICALS GROWTH UNDER NSE
Impact
• As the rate of company’s share is increasing, the stock of the company is 12.75 percent up and
company’s income from Operations for the quarter ended June 2022 stood at Rs.3,995 Crore up by
34 percent and, the company has total 13 major manufacturing plants across the world that’s why the
company is also leading in F&O gainers list.
• As the cost of power and fuel is increased 50 percent, freight expenses has also increased to 21.5
percent and raw materials cost has also increased by 44 percent in Q1 Financial Year 2023 as
compared to last year but the company is trying to stay at elevated levels in the challenging cost
increasing environment.

Findings
• The company has gained massive growth in F&O list due to a healthy growth in operating
performance.
• Instead of higher freight, higher forwarding charges, power and fuel cost company still makes growth
opportunity.
• Company’s revenue has increased 34 percent which is 3995.
• The securities of the company have also passed 95 percent of wide market share.
• Due to efficient management and optimum utilisation of resources in the challenging market
conditions the operating performance of the company is increasing.

Palash Prakash, 12011469, Roll No. RDE564A19

News 1 -
Five Tata Group stocks turn ex-dividend; Tata chemicals

Tata Steel, Tata Power Company, Tata Exlsi, Tata Chemicals and Tinplate Company of India traded at
ex-dividend adjusted price on Wednesday.

Analysis
• Shares of five Tata Group companies, Tata Steel, Tata Power Company, Tata Exlsi, Tata Chemicals
and Tinplate Company of India have turned ex-date for final dividend.
• Tata Steel had announced a final dividend of Rs 51 per share, while Tata Elxsi approved final
dividend of Rs 42.50 per share, followed by Tata Chemicals (Rs 12.50 per share), Tinplate Company
(Rs 4 per share) and Tata Power (Rs 1.75 per share).
• the stock of Tata Steel was up 2 per cent at Rs 963.50 (adjusted to final dividend) after hitting a high
of Rs 974.15 in intra-day trade on the BSE.
• The stock hit a 52-week low of Rs 951.50 in intra-day trade, the exchange data shows.
Impact
• On May 3, 2022, the board of directors of Tata Steel, in order to enhance the liquidity in the capital
market, to widen shareholder base and to make the shares more affordable to small investors,
considered and approved the proposal for sub-division of 1 equity share of the Company having face
value of Rs 10 each into 10 equity shares of the Company having face value of Re 1 each.
• n the past three months, Tata Steel has underperformed the market by falling 22 per cent, against 5.5
per cent decline.

News 2-
Tata Chemicals has gained 25% in a month; ICICI Securities sees
further upside

Tata Chemicals EBITDA grew almost two-fold to ₹1,015 crore in Q1FY23 as against ₹601.2 crore in
the corresponding quarter of last year. EBITDA margin increased by 25.41 percent year on year, from
20.19%, expanding by almost 522 bps, which is the highest to date.

Analysis
• Shares of Tata Chemicals hit an all-time high on August 19 at ₹1,182. The stock has risen from
around ₹870, a month ago to currently trading at around ₹1,087.50 gaining as much as 25 percent in
this period.
• The stock has been under pressure since the start of the year, but since June 30, the stock has started
inching up slowly. From July 2022 to the present, it has increased by 38%. So far in August, it has
surged 15.14%.
• On August 10, the stock increased by 9% intraday after the company reported a 104.51 percent
increase in consolidated net profit to ₹589 crore for the fiscal quarter ending June 30. The company's
net profit stood at ₹288 crore in the corresponding quarter of the previous fiscal.
• Since its Q1 result announcement, the stock has gone from ₹957 to ₹1,087 levels, delivering a return
of over 13.58. Total revenue increased by nearly 33.32% to ₹4,041 crore in the June-end quarter of
FY23, compared to ₹3,031.5 crore in the same period last year.

Impact
• Tata Chemicals in its FY22 annual report said Soda Ash is expected to remain on a growth path in
India and around the world with the increase in demand for solar glass and lithium carbonate.
• In India, recovery in soda ash demand across application sectors, an anticipated reduction in imports,
and increasing energy and freight costs will necessitate an increased focus on operating rates.
• This, coupled with the ongoing programs on driving cost reductions and efficiencies, will likely yield
benefits in margins.
• If energy prices remain at current levels, soda ash prices will have high realisations in the future.

Findings of News1 & 2

• Under basic chemicals, TCL offers soda ash, sodium bicarbonate, cement, salt, marine chemicals,
and crushed refined soda. Specialty chemical consists of solution towards Agro chemical through
Rallis and other specialty solutions such as nutritional products and HDS. Basic chemicals account
for 75% of overall revenue, while the rest comes from specialty products.
• Improvement in the soda ash pricing environment bodes well for future growth outlook
• Meanwhile, foreign institutional investors increased their holdings from 13.62% to 14.99% in the
June 2022 quarter. Mutual funds too raised their stake from 7.36% to 7.58% in the June 2022 quarter.
• Higher share of speciality business to command better valuations for the overall group
Thank you
Group assignment -
Manveen -A20
Mrinalika -A17
Karuna -A18
Palash -A19