Shares of Tata Consumer Products slipped 4 per cent amid a rising market today despite the Tata Group firm reporting a three-fold rise in net profit for the quarter ended March 2022.
Tata Consumer Products stock fell up to 3.9 per cent to Rs 772.55 against the previous close of Rs 803.90 on BSE. The stock stands higher than 50 day and 100 day moving averages but lower than 5 day, 20 day and 200 day moving averages. It has zoomed 20 percent in a year and risen 4.39 per cent in 2022.
Market cap of the firm stood at Rs 71,696 crore on BSE. A total of 2.66 lakh shares of the firm changed hands, amounting to a turnover of Rs 20.93 crore on BSE. The share opened at Rs 809 on BSE.
Later, the stock closed at Rs 776.05, down 3.46 percent against the previous close.
The Tata Group firm reported an over three-fold jump in consolidated net profit at Rs 239.05 crore for the fourth quarter ended March 2022 against a net profit of Rs 74.35 crore in the January-March quarter a year ago, said TCPL.
ALSO READ: Tata Consumer consolidated PAT soars 3x YoY to Rs 218 cr in March quarter
Revenue from operations rose 4.54 per cent to Rs 3,175.41 crore in Q4 against Rs 3,037.22 crore in the same period a year ago.
Here’s a look at what experts and brokerages said about the stock movement and Q4 earnings today.
YES Securities in a note said, “TCPL delivered a marginally better than expected performance especially on the margins front. Market share gains in tea and salt in addition to strong recovery in Nourishco and Starbucks were positives while growth challenges in international business remain a concern. The stock has already reacted positively post announcement of business restructuring plans. Currently we have ADD rating with a target price of Rs 806.”
ALSO READ: Tata Consumer announces reorganisation of India, UK business
Kaustubh Pawaskar- AVP, Fundamental Research at Sharekhan by BNP Paribas said, “I don’t see any specific reason for the correction in the stock price. Tata Consumer stock remains one of our top picks in the FMCG space, in view of relative better off in terms of commodity inflation and strong growth outlook for its India beverage and foods business in the medium term.”
“Further, the integration of recent acquisition and reorganisation of India and International business would add-on to the profitability in the medium term. Thus, any correction should be considered as opportunity to buy a quality stock such as TCPL, which is focusing on becoming large consumer play in the medium term,” he added.
Prashanth Tapse, Vice President (Research), Mehta Equities Ltd, said, “Tata Consumer Products Q4 earnings were below markets expectations with Q4 PAT down 22 per cent to Rs 266 crore against Rs 341 crore on QoQ basis. Overall international business grew flat 1 per cent below street expectations when compared to 12 per cent growth seen in last year. Core business segment delivered a modest growth despite macro and operating challenges during the year both in domestic as well as international business. With inflation taking centre stage in coming quarters, we may see margin pressure impacting this financial year.”
“Post results, the counter is witnessing selling pressure in high PE stocks wherein TCPL trades around 75 times PE. Technically speaking, in short-term the stock may consolidate between Rs 770- Rs 780 levels with uptrend intact on daily charts. Major selling pressure can only be seen on closing basis below Rs 756 mark,” Tapse added.
