Tatva Chintan – A catalyst for growth

Helloooo! We are back again at this comp. It did pretty bad, though. It recently went into net loss, which makes it even more interesting
I went through their Q2FY25 concall and here are the updates:

Weak Demand Environment
They are primarily dependent on 3 Global industries since most of their revenues come from export. These industries are :

1. Heavy Duty Commercial Vehicle (demand for SDA is correlated to this)
   China HDCV Sales (22% down), UK (9% down), EU (5% down)
2. Agrochemicals (PTC and PASC is correlated to this)
3. Polymers (because their products find application in polymers)
   All 3 of these are doing pretty bad and facing headwinds. Management expects a turnaround by Q2FY26. Management says that Q3 will be bad and from Q4 gradual pickup will be seen. but its just a guesstimate by them. Nobody knows when things will turn around. One can simply follow management’s commentary for demand revival.
   I believe that when information will be clear on demand revival, many mutual funds are gonna come and buy because the triggers are placed, its just that we need the demand to come back.

I am attaching a screenshot for updates on each line of business

I am not saying its a brilliant business. IDK. All I know is that it will be a good trade. Triggers are placed , all I am waiting for is the demand to revive. And believe me, its not only me, there are many others (be it institutions or individuals) who are waiting for the same. Because the business listed at P/B – 12x. which demonstrates that it has been a very popular stock among investors. Currently its trading at P/B – 2.6x. Demand revives and people will come pouncing on this one!

Disc : Invested (3% of PF) (Will be increasing allocation as information becomes clear)