Can’t agree more with @hitesh2710 sir on valuations. No doubt tatva has differentiated products that are not easy to manufacture.I have liked the company because of its technical expertise, technocrat promoters and expanding product portfolio but did not enter due to crazy valuations. Margin erosion led to decline. Main reason for erosion is low demand for SDA’s.Although now demand has stabilised to an extent, but their current SDA’s find use mainly in auto emission control. Auto being highly cyclical, i think such margin erosion can repeat. They are trying to add non auto application but it will have limited scope.
On positive side, if management guidance of 100% revenue growth from next year onwards with stable margin holds true, i feel company should rerate.
Disclaimer: Have a tracking position at 1486.
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