These 2 Tata Group stocks have given multibagger returns this year

The Tata Group stock has surged over 130% this year. Photo: Bloomberg

2 min read . Updated: 09 Aug 2021, 11:16 AM IST Livemint

Multibagger stocks: The Tata Group stock has surged over 130% this year alone and skyrocketed more than 300% in the last year

Shares of Tata Group's chemical and technology services subsidiaries, Tata Chemicals and Tata Elxsi have outperformed by turning multibaggers in one year. Tata Elxsi is amongst the world’s leading providers of design and technology services for product engineering and solutions whereas Tata Chemicals is a leading chemical companies in India, dealing with soda ash, soda bicarbonate, cement, salt and other products.

Tata Elxsi shares have given multibagger returns by surging more than 130% this year (year-to-date or YTD) alone and rallying over 300% in the past year. On the other hand, Tata Chemicals stock has jumped over 75% in 2021 and nearly 180% in one year.

Tata Chemicals reported a multi-fold jump in consolidated net profit at ₹342 crore for the June quarter, helped by a rebound in soda ash volumes in the US and India. The company's consolidated net profit stood at ₹74 during the year-ago quarter. Its income from operations grew by 27% to ₹2,977 crore from ₹2,348 crore in the year-ago period.

''In the last six months, TTCH has rallied ~50% on the back of the PLI incentive announced by the GoI for the EV Battery business. TTCH intends to enter into EV Cell manufacturing, but its plans are yet to be finalized,'' Motilal Oswal said in a note on Monday. Factoring its performance in Q1FY22, a faster volume recovery, and improved profitability in IMACID (JV of TTCH to manufacturer phosphoric acid), Motilal has increased our FY22E PAT estimate by 54%. It has maintained its Neutral rating with target price of ₹810/share.

Execution risk in the Energy Science business persists and compounding it is the risk of margin pressure due to increasing RM prices, particularly energy cost in Soda Ash, which poses a near term risk, the brokerage added.

Separately, Design and technology services provider Tata Elxsi's net profit increased by 64% to ₹113.4 crore for the June 2021 quarter from ₹68.9 crore year-on-year (YoY). Its revenue from operations rose 39% to ₹558.3 crore for the said quarter from ₹400.5 crore for the corresponding period a year ago.

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