This Tata Group stock hits 52-week high today: Is it a part of your investment portfolio?

Business Overview

Tata Consumer Products Ltd is a prominent member of the Tata Group and operates in the food and beverages sector both in India and internationally. It holds the distinction of being the second-largest tea company worldwide and enjoys a strong market presence and leadership across multiple regions. It is a consumer goods company that focuses on the production, distribution, and marketing of food and beverage products. The company strives to deliver high-quality products while also contributing to the well-being of its stakeholders and society at large.

It offers a wide range of products including various popular brands such as Tata Tea, Tetley, Tata Coffee, Himalayan natural mineral water, Tata Salt, Tata Sampann, and TATA Gluco+.

Apart from its primary market in South Asia, particularly India, the company has established a strong foothold in various other geographies such as Canada, the UK, North America, Australia, Europe, the Middle East, and Africa.

Financial Performance

During the most recent quarter of FY23, Tata Consumer Products Ltd witnessed a robust revenue growth of 14%, with revenues increasing from Rs 3,175 crore to Rs 3,619 crore. The company achieved an operating profit of Rs 512 crore, resulting in an operating margin of 14%. The net profit for the quarter amounted to Rs 290 crore, with a margin of 8%.

In FY23, the company experienced revenue growth of 11%, with revenues rising from Rs 12,425 crore to Rs 13,783 crore. The operating profit reached Rs 1,856 crore, accompanied by an operating profit margin of 13%. The net profit demonstrated significant growth, escalating from Rs 1,015 crore to Rs 1,320 crore.

It holds a debt of Rs 1,600 crore, with a debt-to-equity ratio of 0.10 times. The ROCE and ROE stood at 9.86% and 6.86%, respectively. The stock is currently trading at a price-to-earnings multiple of 74.4 times.

Stock Performance

The stock started the day at Rs 822 and reached a new 52-week high of Rs 864.80 and closed at Rs 8632.50 on BSE. Not the stock’s 52-week high and low are Rs 864.80 and Rs 685 respectively. The company’s market capitalization amounts to Rs 80,173 crore.

Over the past three months, the stock has generated an impressive return of over 24%, outperforming the Nifty index, which has yielded only a 10% return during the same period. Additionally, the stock has exhibited remarkable growth, delivering a remarkable return of over 130% in the past three years.

The promoters hold a 34.44% stake in the company, while FIIs and DIIs hold stakes of 25.04% and 15.85% respectively. The government also holds a minor stake of approximately 0.01%, and the public holds the remaining 24.65% of the company.

On a weekly timeframe, the stock has demonstrated a significant breakout from a triangular pattern, accompanied by increased trading volume. This breakout, coupled with the higher volume, signals a positive outlook for the stock and can touch a new milestone of Rs 1000 in the upcoming days. Investors must keep this on their radar.