Anand Rathi has issued a buy rating on Sumitomo Chemicals with a target price of ₹650 in its research report dated July 20, 2026. According to the brokerage's analysis, the recommendation is based on potential semiconductor collaboration opportunities in India between Tata Electronics and Sumitomo Chemical, which is expected to be housed under or closely tied to the listed entity SCIL.
The brokerage's conviction stems from several key factors including active discussions between SCIL's management and SCC's ICT & Mobility Solutions division for a high-purity semiconductor-chemicals facility, with an announcement reportedly imminent. As reported by Anand Rathi, SCC's FY25 investor materials have already flagged India under 'planning for commercialization of high-purity chemicals', while SCC has stated commitment to respecting minority shareholder rights.
According to Anand Rathi's back-of-envelope analysis, if structured under SCIL, the proposed semiconductor collaboration could generate incremental EBITDA of ₹3 billion from FY30E, representing approximately 25% above current estimates. The project is expected to be ROCE-accretive with a 30% capital subsidy under ISM 2.0 and potential state-level incentives.
SCIL's materiality to the parent is substantial, contributing approximately 12% of group PAT in FY25 and 45-50% of parent's current market cap. As reported by Anand Rathi, this significant contribution to the parent company's valuation supports the rationale for the collaboration potentially benefiting the listed entity.
Reflecting the higher probability of this business landing in the listed entity, Anand Rathi has raised its target multiple from 36x to 40x, arriving at the revised target price of ₹650 per share. The brokerage's outlook reflects increased confidence in the potential for SCIL to benefit from the semiconductor collaboration opportunities in India.
