Rs 15/Sh Dividend: Tata's Chemical Stock Turned Ex-Dividend, 6-Month Gains At 11%; 7 Analysts Recommend SELL

Tata Group-backed chemical stock turned ex-dividend on June 12 and witnessed a nearly 1% drop after market hours of June 13. This is none other than Tata Chemicals. Despite the latest fall, Tata Chemicals' share price has been in the green on weekly, month-on-month, half-yearly and year-on-year. YTD performance has been flat.

Tata Chemicals' share price stood at Rs 1115.70 apiece, down by 0.7% on BSE after a trading session on June 13, with a market cap of Rs 28,423.16 crore.

The midcap stock's 52-week high and low are at Rs 1,349.70 apiece and Rs 933.00 apiece respectively. In a 5-day trade, the stock is up by 7.2%, while month-on-month the stock is up by 5%. In 6 months, the gain is around 11%. However, year-to-date, the stock is broadly flat. But in a year, Tata Chemicals' share price has surged over 14% on BSE.

Tata Chemicals' stock price turned ex-dividend on June 12 for a dividend payout of Rs 15 per share having a face value of Rs 10 each for FY24.

The beneficial owners of the dividend will be those investors who hold Tata Chemicals shares in their demat accounts as of the record date. Hence, any buying in this stock after June 12, those investors would not be eligible.

This payout will come after it paid a 175% dividend valued at Rs 17.5 per share in FY23.

Apart from dividends. Tata Chemicals board recently approved the proposal for raising funds through the issuance of Non-Convertible Debentures (NCDs) on a private placement basis, for an amount up to Rs 2,000 Crores. The Board also authorized an internal committee, to take all actions in respect of finalization of terms of issuance and allotment of NCDs.

For FY24, on a consolidated basis, Tata Chemicals' income from operations stood at Rs 15,421 crore as compared to Rs 16,789 crore in FY2023. EBITDA stood at Rs 2,847 crore as compared to Rs 3,822 crore in FY2023. PAT (before exceptional items and Non-Controlling Interest ('NCI')) stood at Rs 1,310 crore as compared to Rs 2,452 crore in FY2023.

On a standalone basis, for the full year, the income stood at Rs 4,384 crore as compared to Rs 4,930 crore in FY2023. PAT stood at Rs 794 crore (before exceptional items) as compared to Rs 1,027 crore in FY2023.

BUY Tata Chemicals Stock? As per Trendlyne data, the consensus recommendation from 8 analysts for Tata Chemicals Ltd. is STRONG SELL. Of the total, 5 analysts are suggesting 'Strong SELL' in Tata Chemicals, while 2 analysts have said 'SELL', while 1 has recommended 'Hold'. Nonetheless, EPS is expected to grow by 16.6% in FY25. With the latest consensus, the 1-year average target price in Tata Chemicals is at Rs 888, hinting at a potential downside of 20% from current levels.

In its latest note, Geojit said, "Challenges continue to persist for the company at the global level, such as the large impairment in the UK business, indicating oversupply in the European region. Also, weak demand in China's real estate sector is resulting in excess supply of soda ash."

However, the brokerage further said, "Management is hopeful that demand will stabilise in the international market despite geopolitical uncertainty, because of demand for newer applications, such as solar glass and lithium, and its expansion plans. However, we remain cautious in the near term and expect macroeconomic headwinds to continue. Hence, we reiterate our REDUCE rating on the stock, with a revised target price of Rs. 979, using a target multiple of 26x on FY26E adj. EPS."

A part of the US$ 150 billion Tata Group, Tata Chemicals Limited, is a leading supplier of choice to Glass, Detergent, Industrial and Chemical sectors. The company has a strong position in the crop protection business through its subsidiary company, Rallis India Limited. Tata Chemicals has world-class R&D facilities in Pune and Bangalore.