Tatva Chintan Q4 Results Review - Revenue May Rise 25% With Expansion In Margin: ICICI Securities

ICICI Securities Report

Tatva Chintan Pharma Chem Ltd. reported mixed Q4 FY24 print as volume rose, but lower prices dragged revenue. Gross profit margin improvement failed to compensate the dip in profitability. Tatva has guided to grow volume by 35-40%, revenue by ~25% with Ebitda margin of 22-24% in FY25, which indicates recovery may be gradual.

Despite unimpressive print, commentary on products development, customer qualifications and enhancing sustainability chemistry capabilities remains encouraging, highlighting the strong uptick in normalisation. It has been expanding new products in battery chemicals as well.

We cut our FY25E / FY26E earnings per share by 34%/ 7%, and trim our target price to Rs 1,850 (earlier Rs 1,975), valuing the stock at an unchanged PE multiple of 28 times. Maintain Buy.

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