On June 7, a day after Tata Group chairman N Chandrasekaran stated that they are open to acquisitions and expanding into new categories in the annual general meeting, the share price of Tata Consumer Products increased by more than 2.5 per cent.
He said that we are currently growing both the food and beverage industries. Therefore, these businesses are very focused, and we must scale them. Additionally, we are funding R&D and innovation. We are considering new categories and potential acquisition targets.
Tata Consumer stock was trading at Rs 813.90 at 12:15 p.m. on the NSE, up 2.7 per cent from the previous year. The stock has increased by 15% from Rs 703 levels ever since the release of Q4 results in April. The company was in negotiations to purchase Bisleri in November 2022, but those negotiations fell through.
The management anticipates that India’s economy will continue to grow faster than the global market, leading to an increase in the proportion of revenue coming from the Indian market. According to N Chandra, the profit margin for Indian businesses is higher than that of other countries, which is around 11% for international trade and around 14% for branded businesses.
The company introduced 34 products last year. The Indian market currently accounts for 47% of the total revenue generated by TCPL’s branded tea, while the international market accounts for 11% of the company’s coffee sales. The company has set aside a $400 crore capex plan to foster growth.
Chandra also mentioned that NourishCo Beverages, a company subsidiary, plans to surpass revenue of Rs 1,000 crore in the current fiscal year, up from Rs 645 crore in FY23. Tata Consumer reported a consolidated net profit of Rs 268.59 crore for the quarter ended March 2023, up 23.46 per cent from Rs 217.54 crore in the same quarter the previous year. Operating income totalled Rs 3,618.73 crore, up 13.96% from Rs 3,175.41 crore in the corresponding quarter last year. The consensus price target for the stock is Rs 935.71, up 14% from the current price.
