TATA CHEM GETS BUY FROM MOTILAL

Tata Chemicals has launched five products ( khichdi mix, cheela mix, chutneys) over the past 8- 12 months, which are sold only in Star Bazaar outlets and on e- commerce platform Amazon. The strategy in the consumer business is to first build the base by launching products that would provide scale albeit with relatively low margins, and then foray into valueadded products to pull the margins up.

In line with this, the company has scaled up pulses, is in the process of scaling up besan and is coming up with value- added products like mixes and chutneys. Given the expedited launch and scale- up of products, the business is expected to remain in an investment phase over the next 2- 3 years. Notably, Tata Chemicals is doubling its marketing investment, especially for new products. Tata Chemicals has changed the inventory policy for pulses, capping it at 45 days. Now, instead of securing raw material at the time of harvest and keeping the inventory, the broking house said the company procures from the mandi on a need- to- need basis.

Broking firm: Motilal Oswal Financial Services Rating: Buy Closing price: 689.75