Angel Broking has maintained buy rating on Tata Chemicals with a target of Rs 394 in its February 1, 2008 report. “Although, the company’s 3QFY2008 numbers were impacted by higher Interest outgo, raw material and freight costs, we remain positive over the medium term outlook for the sector. Recently, the company made its intention clear that it would be acquiring the Soda Ash assets of General Chemical Industrial Products Inc. (GCIP), USA. This will enhance Tata Chemicals’ Soda Ash capacity to over 5.5mn tonnes taking it to the second position in the global Soda Ash market competing neck-to-neck with FMC. We have not factored in the GCIP acquisition as yet as Tata Chem has still to complete the acquisition. During 3QFY2008, over 64% of the FCCBs were converted into equity. We have factored in full dilution and based on the recent results have changed our estimates with the inclusion of FY2010 numbers as well. Currently, the stock is trading at 8.5x FY2010E EPS of Rs 34.2. We maintain a Buy on the stock, with a revised Target Price of Rs 394 (Rs 387), “says Angel Broking research report, " according to Angel Broking research report.
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