Buy Tatva Chintan Pharma Chem; target of Rs 2385: ICICI Securities

Moneycontrol • 11 days ago

Original source

Key Investment Pillars

  • SDA segment growth: Revenue jumped 63.2% YoY in Q2FY27, driven by implementation of Euro-7 emission standards in Europe, with continued opportunities expected.
  • Electrolyte salt and PASC expansion: Growth opportunities in energy storage and agro/pharma products, with commercialization progress and a strong pipeline aiding medium-term growth.
  • Margin normalization: Expected reduction in solvent prices and freight charges to support margin expansion in coming quarters.
  • Greenfield project expansion: Progressing as planned, providing visibility for medium-term growth and aiding commercialization of new molecules.

Thesis Validation Checklist

  • Revenue growth sustainability: Watch for sustained revenue growth across segments, particularly SDA and PASC.
  • Margin expansion: Monitor for signs of margin normalization as solvent prices and freight charges reduce.
  • New product commercialization: Track progress in commercializing new products, especially in the electrolyte salt and PASC segments.
  • Greenfield project completion: Await updates on the completion and operationalization of the new manufacturing facility.