Tata Group Stocks: Shares of Tata Consumer Products, the food and beverage company of Tata Group, have earned huge profits for investors, but at present there is strong selling pressure in it. In about 13 years, it converted Rs 1 lakh of investors into a capital of Rs 1 crore and reached record high. However, then it slipped by 28 percent from this high and may fall further by 28 percent. At present it is priced at Rs 907.25 on BSE (Tata Consumer Products Share Price).
Why did the brokerage advise to sell Tata Consumer Products?
Tata Consumer Products business operates primarily through four business segments – Food (Tata Tea, Tea Sampann, Capital Foods, Organic India, Tata Soulful), Beverages (Tata Tea, Himalaya Water, Tata Gluco+, Tata Frusky, Tetley Tea, At O Clock Coffee), non-branded products and café chains (Tata Starbucks). Ventura believes that its revenue can grow at a compound annual growth rate (CAGR) of 14.8 percent between fiscal year 2024 and fiscal year 2027. After the rights issue, its total debt has reduced and is expected to remain close to zero.
According to the brokerage, the performance of the new business is good and the old business is continuously growing but the competition from domestic and foreign companies is increasing, especially the Tata Starbucks joint venture has put a lot of pressure on pricing and margins. Apart from this, Ventura also says that due to continued dependence on old products, the product mix has become less favorable, which can blow the margins of Tata Consumer. In such a situation, Ventura has advised to sell it and fixed the target price at Rs 679.
How were the shares in one year?
Shares of Tata Consumer were at Rs 1254.36 on March 7, 2024, which is a record high level for its shares. However, within 9 months from this high level, it slipped by more than 29 percent and a few days ago on December 20, 2024, it reached the price of Rs 884.00, which is the record low level of one year for its shares. Shares recovered at lower levels and recovered more than two and a half percent on the basis of buying, but it is still about 28 percent downside from one year’s high. However, according to experts, it is going to break further and it may slip by about 28 percent from the current level.
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