Shares of Tatva Chintan Pharma Chem surged 16.39% to Rs 234.10 on Monday after the specialty chemicals company reported a sharp improvement in earnings for the quarter ended June 30, 2026.

Last week, the company reported its Q1 numbers. Tatva Chintan’s consolidated net profit more than doubled year-on-year to Rs 16 crore in Q1 FY27 from Rs 7 crore in the corresponding quarter last year. Revenue from operations rose 43% YoY to Rs 167 crore, compared with Rs 116.8 crore in the year-ago period.

Operating performance also improved significantly, with EBITDA surging 86.6% YoY to Rs 32.1 crore from Rs 17.2 crore. The EBITDA margin expanded to 19.2% from 14.7% a year earlier, reflecting stronger operating profitability.

The company announced the results after its Board of Directors approved the unaudited standalone and consolidated financial results for the quarter ended June 30, 2026, at a meeting held on July 17.

Alongside the quarterly results, the board approved the reappointment of Managing Director Chintan Nitinkumar Shah and Whole-time Directors Ajaykumar Mansukhlal Patel and Shekhar Rasiklal Somani for a further three-year term, subject to shareholders' approval at the forthcoming annual general meeting.

The board also approved a proposed capacity expansion at the company's new greenfield manufacturing unit at Dahej-III in Gujarat. The expansion will involve the installation of an aggregate reactor capacity of 344 kilolitres at an estimated investment of around Rs 200 crore. The project will be financed through a combination of internal accruals and debt.

Meanwhile, Deven Choksey Research, in its brokerage note on Monday, maintained an 'Accumulate' rating on the stock and set a target price of Rs 1,765, implying an upside of 8.2% from the current market price of Rs 1,632.

The brokerage said, "Strong volume-led demand continues to drive growth, while recent pricing pass-through provides an incremental earnings lever. With raw material cost increases now being passed on to customers, margins are expected to gradually improve towards the guided 20-22% range, supporting healthy earnings growth through FY27."

On the company's expansion plans, Deven Choksey said, "The INR 200 Cr greenfield multi-purpose facility demonstrates management's proactive capital allocation, creating capacity ahead of Dahej reaching its revenue ceiling of INR 800-850 Cr. The fungible facility is expected to add around INR 300 Cr of peak revenue potential, ensuring growth visibility and sustaining a 20-25% revenue CAGR over the medium term."

The brokerage also highlighted the company's product pipeline, saying, "A robust pipeline across pharma intermediates, semiconductor chemicals, and continuous flow chemistry provides multiple growth engines beyond the core portfolio. Commercialisation of new molecules and process innovations is expected to enhance product mix, improve operating efficiency, and reinforce the company's innovation-led growth trajectory."

Deven Choksey expects the new facility to be commissioned within 18-21 months. "With commissioning targeted within 18-21 months and an expected asset turnover of around 1.5-2.0x, the facility is expected to support the company's next phase of growth and provide visibility towards crossing the INR 900 Cr revenue milestone over the medium term," the brokerage said.

"While rising input costs have exerted some pressure, the company has begun passing on higher raw material costs to customers, supporting margin stability," it added.

The brokerage expects Tatva Chintan Pharma Chem's revenue, EBITDA and PAT to grow at a CAGR of 28%, 40% and 47%, respectively, over FY26-FY28E. It said the company is currently trading at 41.5x FY28E earnings and valued the stock at a P/E multiple of 44x FY28E EPS, arriving at a target price of Rs 1,765.

"Going forward, timely execution of the capex, commercialization of new capacities, and the pace of revenue scale-up will remain the key monitorables, while the overall business outlook continues to remain positive," Deven Choksey said.