This Tata stock is up 7% today: What's the reason?
What's the story
Tata Chemicals Ltd, a key player in the Tata Group, has witnessed a sharp rise in its share price. The company's stock surged nearly 7% to ₹995.90 on the NSE today, after global brokerage firm Morgan Stanley announced a 'double upgrade' for the company. The upgrade came in light of the firm's improved EBITDA and net profit despite revenue and sales volume challenges during the June quarter (Q1 FY26) and signs of global supply cutbacks.
Price adjustment
Morgan Stanley raises price target to ₹1,127
Along with the upgrade, Morgan Stanley also raised its price target for Tata Chemicals to ₹1,127 from the previous ₹839. The brokerage firm noted that "Investor expectations for the commodity chemical cycle are the most bearish we have seen in 20 years of watching the sector." It added that with a supply response underway, it might be time to revisit equities.
Market dynamics
Tata Chemicals posts higher profit, EBITDA
Despite a 1.8% year-on-year decline in revenue for the June quarter, Tata Chemicals managed to post a 13% rise in EBITDA. The company's EBITDA margin also improved by 230 basis points to 17.4%, compared to the same period last year. However, sales volumes fell by 1% year-on-year, primarily due to the closure of its Lostock facility in the UK. The company also faces broader market challenges such as oversupply and high inventory levels across regions.