Tata Chemicals Ltd shares continue their strong up move for the sixth straight session in Thursday's trade. The stock surged 14.52 per cent to scale its all-time high value of Rs 1,349.70. At this price, the scrip has soared 43.67 per cent in six trading days. The ongoing upward march in the share price could be largely attributed to the buzz on Street about Tata Sons' potential listing, which is a promoter in Tata Chemicals.
Analysts largely remained positive on the counter. Support on the counter will be at Rs 1,140. On the higher side, the stock may see above Rs 1,450 level in the near term. Traders should also consider booking profits at current levels, one of the analysts said.
"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 AR Ramachandran from Tips2trades.
The Tata Group-owned company's consolidated net profit fell 60 per cent from the previous year to Rs 158 crore in the three months ended December 31.
The stock saw heavy trading volumes today as around 27.93 lakh shares were seen changing hands on BSE. The figure was higher than the two-week average volume of 2.99 lakh shares. Turnover on the counter came at Rs 359.27 crore, commanding a market capitalisation of Rs 33,438.04 crore.
Tata Sons is the holding company of the Tata Group, majorly owned by Dorabji Tata Trust (28 per cent) and Ratan Tata Trust (24 per cent). Both Tata Motors and Tata Chemicals own around 3 per cent stake in the holding company. Tata Power and Indian Hotels own 2 per cent and 1 per cent, respectively.
In a separate development, Fitch Ratings has revised its outlook on Tata Chemicals' long-term foreign-currency Issuer default rating (IDR) to 'Stable' from 'Positive' and affirmed the rating at 'BB+'.
As of December 2023, promoters held a 37.98 per cent stake in Tata Chemicals.