Tata Chemicals moves ahead

The share price of Tata Chemicals Ltd. has been observed during the past few weeks on account of the restructuring exercise that it recently went through. Analysts also say that the company could very…

The share price of Tata Chemicals Ltd. has been observed during the past few weeks on account of the restructuring exercise that it recently went through. Analysts also say that the company could very soon emerge as a global competitive player in the soda ash market. The stock has moved up considerably in June gaining almost 30% since 20 May when it was at INR 47 levels. “The prices in the soda ash market worldwide have steadied considerably thus cushioning the import duty reduction of 20%. Players like Tata Chem are now able to leverage their low cost synthetic soda ash manufacture to attract business in the global scenario,” an analyst said. Not only the soda ash business, the other segments where Tata Chem has a presence also seems to be looking up. Fertiliser is one such segment. “With the onset of monsoon as per schedule and the likelihood of a normal monsoon in India, the agriculture sector is looking up. The fertiliser industry has thus set foot on the path of revival,” said an industry expert. Also, the decontrol in the fertiliser industry is expected to boost margins for companies such as Tata Chem especially in the urea segment, where it has a marketing alliance with Rallis India, he added. The company has decided to divest from its non core businesses which is expected to bring in the much-needed focus and cash flows. Tata Chem has already come out of the detergents business and is expected to exit from the cement business as well.