The analyst sees potential for a sharp FY26 turnaround and a medium-term re-rating.

Tatva Chintan has broken out of a 1.5-year downtrend, both technically and fundamentally, suggesting the start of a new growth cycle, according to SEBI-registered analyst Rajneesh Sharma.

At the time of writing, Tatva Chintan shares were trading at ₹939.65, up ₹6.9 or 0.7% on the day.

He highlights the upcoming EURO 7 emission standards as a structural growth driver, with light-duty vehicles affected from July 2025 and heavy-duty from July 2027. 

This will increase catalyst requirements by 2.8 times per vehicle. Tatva is estimated to capture $15–22 million of the incremental Solvent Deasphalting Agent (SDA) total addressable market, with the ramp starting in the third quarter (Q3).

Sharma also points to the company’s global-first alternate synthesis route for an agrochemical molecule as a new high-margin growth pillar, with bulk orders secured and commercial shipments planned for Q3. 

The management expects combined agrochemical and SDA growth of 40–70% in FY26. Additional growth levers include electrolyte salts, which are expected to grow 2–3 times from the first quarter (Q1), and four pharma intermediates currently in validation or commercial supply.

On guidance, Sharma said FY26 revenue is expected to grow over 25% year-on-year, with core profit margins expanding from 9% to 20%. 

He identified key milestones, including electrolyte salts and initial SDA volumes in Q1, followed by full SDA and agrochemical molecule ramp in Q3.

From a technical perspective, Sharma confirms that the long-term downtrend channel since late 2022 has been decisively broken, with the ₹825–850 resistance level now acting as strong support. 

He noted a bullish RSI divergence, with the relative strength index (RSI) at 62.63, indicating momentum without overbought conditions. 

The breakout occurred on volume of about 2 million shares, versus an average of 25,500, suggesting institutional accumulation.

On valuation, Sharma notes FY25 revenue was flat and profit-after-tax sharply lower, but FY26 is poised for sharp revenue and margin expansion, making Tatva a re-rating candidate. 

He identified risks, including the pace of the adoption of EURO 7, the commissioning of the PASC plant, and commodity volatility affecting SDA margins.

Sharma said that Tatva Chintan could be entering a new cycle driven by EURO 7 and the agrochemical molecule. It has strong support at ₹825–850 and medium-term price targets of ₹1,250–₹1,300 over 12 to 18 months. 

He advised investors to watch SDA volumes in Q3, agrochemical molecule scaling, and margin improvement toward 20% core profit.

On Stocktwits, retail sentiment was ‘bullish’ amid ‘normal’ message volume.

The stock has risen 9.3% so far in 2025.

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