Tata Chemicals Ltd

Stock Opportunities
82

Exide is a bad capital allocator. They have businesses in other areas like insurance which have nothing to do with batteries.

If you compare annual reports of Exide and Amaraja, Exide AR doesn’t mention EV or lithium ion battery at all. Amaraja still has some foray into this sector and just a barebones assembly plant for lithium ions.

In terms of batteries, the only listed plays were

  1. Amaraja - most decent option but has political connections and issues related to it plants and pollution complaints

  2. Tata Chemicals - will take years before they make any substantial investment into EV space, I had entered this stock around 400, exited the same at 600 due to two main reasons 1. EV battery space is undergoing its own disruption with several technologies being developed at rapid scale and no clear signs as to who will emerge as a winner 2. Tata Chemicals will take a long time to establish itself in this sector, this is not a priority for them at the moment

  3. Exide Industries - this is probably the worst possible company anyone can invest into. They are already losing market share to Amaraja, allocating capital into other sectors which aren’t in their core competence and have no plans to invest into future technologies. With time, Exide will diminish into oblivion.

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85

Hi,

Govt approves PLI scheme of 18100 crore for 'National Programme on Advanced Chemistry Cell (ACC) Battery Storage. Its primary aim will to reduce import dependence. ACC battery storage manufacturers will be selected through a transparent competitive bidding process.

Now whether Tata chemicals is going to take part in the bidding process or not that needs to be seen.
Apart from Tata chemicals who are going to foray into this field??

Thanks,
Deb

86

Reading though the FY19-20 Report, there is mention of how they intend to develop the Energy science Business (Page 18, 19).

I couldn’t find the FY21 Annual report, not sure if it is out yet. Anyone has link, pls provide.

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89

Hi,

Big Corporate houses are lining up to tap PLI scheme for Lithium Ion Cells. Competition is heating up in this big future market.

https://infralive.com/web/ril-tata-adani-among-those-lining-up-to-tap-pli-scheme-for-lithium-ion-cells/

Thanks,
Deb

90

Interestingly, the whole Energy Science division is no more visible in Annual report.

Q2 - https://www.tatachemicals.com/upload/content_pdf/q2-fy202-21-analyst-communication-20201029.pdf - Page 4 mentions the Energy science division

Q3/Q4 and Annual report for last year no longer mentions this division. Anyone has any idea where they merge it to?

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91

Today AGM was held.

On the lithium-ion battery venture, Chandrasekaran said that Tata Chemicals had partnered with ISRO to use its cell technology. The pilot has been completed but the company has not decided whether it needs to get into this. “It is still under strategic evaluation.” ~ quote from timesofinfia article.

92

Hi,

Company posted robust results.

Q1 PAT of Rs342cr up 362% yoy on rebound in Soda Ash volumes in US and India

Please check the investor’s presentation

Thanks,
Deb

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93
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94

Interesting article, i am excited about the synergies coming in from soda ash being input to battary production. Have done a simple analysis and india PV market would require 33184 tons of soda ash for lithion ion battary production (not counting 2/3 wheelars).

Lithium used Car Market
Per cell (gm) >2 2020 PV sold 2,433,464
Per Car (kg) (5000 cells) 10 assume 30% target 730039.2
22 Cars equals 1 ton 1
Lithium used for 30% penetration 33183.6
Soda Ash demand from EV Per Year 33183.6
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95

Hi,

When business is on revival, Wonder why the sale plan.

Tata Explores $1 Billion Sale Of U.S. Soda Ash Unit.

Thanks,
Deb

97

Hi,

Quarterly results out.

Thanks,
Deb

98

Please comment

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99

Yes this is one step towards complete EV by Tata.
In October 2021 Tata chemical news came that it will be selling its soda Ash unit in USA for $ 1 Bn

Now this news that they are in talks to buy UK company which Is into EV battery

One interesting point noted is as below:

The JOHNSON MATHEW IS Also a leading maker of pollution-reducing catalytic converters had invested millions of dollars on developing the eLNO cathode – a crucial component of an electric car’s battery that would cut the consumption of cobalt -

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100

Catalytic converters are one of the costly components around the engine and in US, it’s not possible to run a car with faulty catalytic converters for long as it turns on the check engine light and it’s difficult to pass yearly renewal tests…
Are you aware if Tata chemicals, via this buyout…enter into this or any other engine related crucial component also?
Is this component also an important part of EV car’s engine?
Lastly, who are other competitors in India amd also globally for this component?

101

We have to wait for official confirmation from the Company.

102

Why would an EV need a catalytic converter? It’s used on ICE of cars to reduce the exhaust gases emissons when running on diesel or petrol.

Of course there can be other metals in an EV engine that are expensive but why would it need a converter unless it’s a hybrid

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105
106

Soda Ash Market Outlook for 2021-2026

While the report takes in to account all the traditional uses of Soda Ash in Glass, Detergents, Pharmaceuticals, food, cosmetics , metallurgical process engineering, but not sure if it has captured the following emerging trends on utility of Soda Ash such as follows :

1.Its usage in PV Solar panel both flat glass and tempered glass

2.Soda Ash is required for sodium ion battery manufacturing which is the latest emerging trend all over the world to avoid future supply disruptions due to scarcity of lithium and cobalt.

3.Soda Ash is required for Refining of lithium (for Lithium ion batteries)- 1 tonne Soda ash required for refining 1 Tonne of Lithium

When it comes to Tata chemical,
1.Tata chemical is the 3rd largest Soda Ash manufacturer in the WORLD

2.Tata Chemicals is the 6th largest manufacturer of sodium bicarbonate in the world

3.While Tata chemical has no plans right now to produce sodium Ion batteries , but Reliance has concrete plans and very likely that Reliance may source it’s Soda ash requirement from Tata chemicals, as Tata chemicals may be able to cater Soda Ash at lower price due to it’s economies of scale.

4.Eventually, Tata chemical may decide to go in for more sustainable Sodium Ion batteries, though it has currently has a tie up with ISRO to make Lithium ion battery

5.It is in the process of setting up a Lithium ion battery Recycling plant.

6.Goes with out saying it is the largest Iodised Salt manufacturer and has created the Tata Namak brand - well known in every house holds

7.It is also into Water purifier " Tata swatch "

8.It has 50% stake in Rallis India (Crop Protection) which is considered a Dark horse.

9.Tata Chemicals has expertise in Nano technology and Biotechnology.

So it appears Good days ahead for Tata chemicals. The accelerated growth may come from Renewables, electric energy storage solution, EV…
The stock rightly has run up quite a bit over last one year and the stock price is moving in a narrow range even during the recent Volatility.

Discl: Invested at lower level and in the process of adding in decline…
I may be biased. Please do your own assessment before putting your hard earned money.

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107

Brokerage report on q3 earning estimates may or may not come true. But in the long term if the current overall economic scenario, thrust on renewables continue, this is one stock is likely to do well over next 2-3 years considering its current valuation vs it’s Peers in chemical sector !

Discl : Invested for long term…may be biased. please do your own assessment before investing

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108

A Very good set of Q3 2022 numbers from Tata chemicals !

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