The market has responded very negatively to the Q4FY21 results of Tata Chemicals. But before this heavy downfall in the stock price of Tata Chemicals, the stock witnessed an impressive rally in the past. Hence, in this blog, we will be discussing the possible reasons behind this significant rally in the stock and downfall in the stock prices post its Quarterly Results.
Tata Chemicals is part of the Tata Group engaged in the chemical business. In the recent past, Tata Chemicals has witnessed a significant rally in its stock prices, but post its quarterly result of the last quarter of the Financial Year 2021, the same has fallen by more than 10% in few trading sessions.
A) Possible Reasons behind the rally in the Stock Price of Tata Chemicals:
i) Positive Sentiments in Chemical Sector:
iii) Stake in Tata Group Business:
B) Reason behind Disappointment of the Market:
i) Tata Chemicals has posted very disappointing quarterly results for Q4FY21.
ii) Operating Profit Margins (OPM) of the company has fallen to 13% from the levels of 21%-25%.
iii) Reason behind the fall in Operating Profit Margins is due to the rise in prices of raw materials.
iv) But the major reason behind the fall in stock price was no clear information or plan was discussed by the management in the quarterly updates which were highly expected in the market.
Role of Tata Chemicals in the EV Ecosystem of the Tata Group was one of the core reason behind the rally in the stock prices but in the same context, this price began to move towards a downward trajectory when no clear indication was provided by the management regarding Lithium-Ion battery manufacturing during the quarterly results. This disappointment in the market for the Tata Chemical Stock is short-term, as there is a low downside risk available in this stock. Do proper research and study before investing.