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After hitting a new all-time high of ₹214.95 on Wednesday, Tata Global Beverages’ stock closed with a loss of 2.3 per cent on profit-booking on the NSE. Intraday the stock rose 4 per cent.
The news of Tata Sons hiking its stake in the company by 6.8 per cent amid a group restructuring exercise has failed to enthuse investors as the market is more worried about the company’s outlook more than the cash inflow of ₹650 crore through the sale of Tata Chemicals’ shares to Tata Sons.
On a full-year basis, the company’s financial perfomance has been volatile. While FY17 has been good, the previous two financial years were not so. No analyst tracks the stock because of inconsistency in performance and a plethora of brands or geographical presence.
“The company is so diversified in terms of geography and brands that the overall financial performance is mostly flattish as good performing regions/products compensate for bad performing ones. So, whatever they do is negated on an overall basis,” said a person heading research at a broking firm.
Revenue generationWhile South Asia formed 46 per cent of consolidated revenues in FY17, the US, Canada, Australia together accounted for 26 per cent followed by 27 per cent for Europe, Middle East and Africa.
Similarly, while Indian tea brands formed 45 per cent of revenues, Tetley and Eight O Clock contributed 29 per cent and 14 per cent, respectively. Other brands such as Good Earth (US), Vitax (Poland), Jemca (Czech Republic), Teapigs, Water Business (India), MAP (Australia) formed another 12 per cent of sales.
Nevertheless, performance in FY17 and the June 2017 quarter have been good, which has led to the stock surging more than 50 per cent in the last six months.
In the June quarter, while consolidated net sales were down 1.8 per cent, operating profit and net profit rose by about 3 per cent and 19 per cent, respectively.
In FY17, the topline grew 2.2 per cent and the company turned around with adjusted net profit of ₹454.8 crore compared to a loss of ₹37.09 crore in FY16.
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