In Thursday's trading, shares of Tata Chemicals Ltd. continued their strong upward trend for the sixth straight day. The stock reached its all-time high value of Rs 1,349.70 with a 14.52 percent rise. The share has increased 43.67% at this price in the last six trading days. One major reason for the share price's continuous rise is the excitement on Wall Street surrounding Tata Sons' possible listing as a Tata Chemicals promoter.
For the most part, analysts were optimistic about the counter. The counter's support will be set at Rs 1,140. In the foreseeable future, the stock could rise over the Rs 1,450 mark. One analyst advised traders to think about booking gains at the current levels.
"Reserve Bank of India (RBI) has classified Tata Sons as an upper-layer NBFC (non-banking financial company), which makes it mandatory to list itself by September 2025. Tata Chemicals is promoted by Tata Sons and the latter owns 31.90 per cent in it. Tata Chemicals holds around 10,000 shares of Tata Sons. This is a potential value unlocking opportunity and a chance to get indirect exposure to Tata Sons. Overall, the chemical space is going through a rough patch. So, the valuations were quite attractive," Devarsh Vakil, Deputy Head of Retail Research at HDFC Securities, told Business Today TV.
"The stock has seen a very strong buying action to hit its all-time high trajectory. The upside momentum can increase further," said Rajesh Palviya, Head Technical Research at Axis Securities.
"There are some expectations in the market about Tata Sons getting listed. If that happens, then it would be a positive development for the listed Tata Group entities, including Tata Chemicals. But, do not rush and buy at whatever levels. Those holding Tata Chemicals shares can continue with their positions, hoping for the eventual listing of Tata Sons," said G Chokkalingam, founder and MD of Equinomics Research.
"Despite below average third-quarter (Q3 FY24) results, potential listing news of Tata Sons is benefiting Tata Chemicals the most. It has led to a strong rally with next resistance at Rs 1,473. However, investors should book profits at current levels as stock is very overbought and a daily close below support of Rs 1,140 could lead to Rs 930 in the near term," said
Consolidated net profit for the Tata Group-owned company in the three months that ended on December 31 was Rs 158 crore, a 60% decrease from the same period the year before.
Today's trading volumes for the stock were high, with almost 27.93 lakh shares changing hands on the BSE. The amount exceeded the 2.99 lakh share two-week average volume. With a market capitalization of Rs 33,438.04 crore, the counter's turnover was Rs 359.27 crore.
The two largest shareholders of Tata Sons, the holding company of the Tata Group, are the Dorabji Tata Trust (28%) and the Ratan Tata Trust (24%). About 3% of the holding company is owned by Tata Motors and Tata Chemicals. Two percent is owned by Tata Power, while one percent is owned by Indian Hotels.
Meanwhile, Fitch Ratings has maintained Tata Chemicals' 'BB+' rating and changed its outlook for the company's long-term foreign-currency Issuer default rating (IDR) from 'Positive' to 'Stable'.
Promoters owned a 37.98% share in Tata Chemicals as of December 2023.
