PINC Research has maintained its hold rating on Tata Chemicals with a price target of Rs 165 in its April 06, 2009 research report.
“While TCL’s management is confident that current soda ash prices may hold for next 3 months, it sounded cautious on H2CY09 prices outlook. Both GCIP and BMG recorded a decent jump of USD 25 and GBP 20 resp. in their term contracts in Janaury ’09. However, currently African and Asian markets are witnessing volumes shrinkage. Also, volumes in USA and Europe are seeing contraction mainly in flat glass demand. TCL is getting KG basin gas at USD 6.2/mmbtu. It has increased urea capacity through debottlenecking by 30% to 11.4 mn mt. We expect volumes and prices to contract by 10-15% in FY10. We maintain our ‘HOLD’ recommendation with a price target of Rs 165 (6x FY10E EPS),” says PINC’s research report.
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