IIFL Institutional Equities, a part of the IIFL Group, one of the leading players in the Indian financial services space, recommends “Buy ” Tata Chemicals.
According to IIFL report, after Tata Chemicals’ (TCL) 1QFY13 results, we lower our FY13ii EPS estimate by 4% to Rs 34.5 but raise our FY14ii EPS estimate by 5% to Rs 39.9.
As such, the results were weak owing to temporary plant shutdowns, but the highlight was the substantial improvement in the Indian chemical segment’s profitability, which is now at a two-year high and is likely to sustain near current levels.
We expect TCL’s results to improve in the coming quarters as production resumes in all its facilities. Thestock is trading at 8x FY14ii EPS. Valuations are attractive, in our view. We reiterate BUY, brokerage added.
The report was published by IIFL’s Institutional Equities Research desk.