Our 22th company in the Series of Best Stocks to Buy in India for Long term 2022 is Tata Chemicals Ltd.
This company is good for investing purpose or not ?
Let’s start with the Company profile
Company Profile :
Tata Chemicals Limited is a holding company which manufactures soda ash and sodium bicarbonate for diverse industries, such as glass, detergents, silicates, textiles, food, pharmaceuticals, animal feed, mining and chemical processing.
Now Let’s check the important fundamental figures of this company. This is a mid cap company with Market Cap ₹28,638cr. We can check more fundamental details below in depth:
Company Fundamental Detail :
PE Ratio: 22.77
Sector PE Ratio: 13.41
PE Ratio of this company is high than Sector’s PE. So it’s a Good PE than the peers of this company.
PB Ratio : 1.49
Sector PB Ratio : 2.70
PB Ratio of this company is low than Sector’s PB ratio. So it’s Good PB than the peers of this company.
Dividend Yield : 1.11%
Sector Dividend Yield : 2.31%
Dividend of this company is Low than Sector’s dividend. So it’s Average PB than the peers of this company.
ROE (Return on equity) and ROCE (Return on capital equity) is Below Average.
According to above data, this company is looking fundamentally average. Now We’ll check the company Financially data:
Company Financial Detail
We should check now liabilities of company also in the below table
Total Current & Non Current Liabilities
Liabilities of a company refers to the debt of that company. We should also aware the debt of company. In 2022 , Company have 14,685.76 Cr. debt.
Let’s check the Free Cash flow of the company
Free Cash flow
Debt Level: Tata Chemicals net debt to equity ratio (23.1%) is considered satisfactory.
Reducing Debt: Tata Chemicals debt to equity ratio has reduced from 66.5% to 36.7% over the past 5 years.
Debt Coverage: Tata Chemicals debt is well covered by operating cash flow (23.4%).
Interest Coverage: Tata Chemicals interest payments on its debt are well covered by EBIT (22.9x coverage).
Share Holding Pattern
|Promotor Holding||Foreign Institution|
|Other Domestic Institutions||Retail & Others|
Above table showing there is no big change in Promotors holding which is 37.98% in June 2021. FIIs invested in June 2022 with 14.99% and retail investor is 27.89%.
Investment Checklist for Tata Chemicals Ltd.
- The company is currently profitable
- Earnings are forecast to grow by an average of 3.7% per year for the next 3 years
- Debt level is low and not considered a risk
- Dividend of 1.11% is sustainable
- Share price has been stable over the past 3 months
- The company’s earnings are high quality
- Profit margins improved or Tata Chemicals became profitable
- They have sufficient analyst coverage
- Shareholders have not been meaningfully diluted in the past year or recently listed
- Revenue is meaningful (₹136B)
- Market cap is meaningful (₹287B)
- Tata Chemicals does not have negative shareholders equity.
According to its historical performance we can predict stock target.
Entry Buying Zone : Premium members can see only
Target: Premium members can see only
Time Horizon:Premium members can see only
Risk Profile: Premium members can see only
Entry Buying Zone : 800 to 900
Target: 1200 (40% Upside)
Time Horizon: 1 Year
Risk Profile: Low Risk (Stock is 1.88x as volatile as Nifty)
Hope you liked Our 22th company in the Series of Best stocks to buy in India for Long term 2022. We tried to cover many important things about this company, if you think anything left to cover, you can comment us and we’ll try to cover those things also.
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