Rs. 7.75/Share Dividend: Record Date In Due Course; Buy The TATA Group Stock?

The major food and beverage businesses of the Tata Group have been unified under the corporate roof of Tata Consumer Products Limited, a specialised consumer products firm. The company operates in both international and Indian markets, with a consolidated annual turnover of around Rs. 15,206 Crs. The financial results for the quarter and year ending March 31, 2024, have been released by the firm. Additionally, a 775% dividend recommendation with a face value of Rs 1 per share has been made.

Tata Consumer Products Dividend

"The Board has recommended a final dividend of Rs. 7.75/- per equity share of Re. 1 each (775%) for the financial year 2023-24. The Dividend, if approved by the members at the ensuing 61st Annual General Meeting, will be paid/dispatched (subject to deduction of tax at source) after the AGM and within 30 days of its declaration," said Tata Consumer Products in a regulatory filing.

Tata Consumer Products Q4 Results

The company reported a consolidated net profit of Rs 268 Cr during the quarter ended March 2024 compared to Rs 346 Cr in the year-ago quarter, representing a fall of 23% YoY. For the full financial year FY24, its net profit was stable at Rs 1,301 Cr as against Rs 1,347 Cr in FY23. The drop in net profit was driven by higher exceptional costs and higher interest income according to the company.

The quarter's revenue from operations was Rs 3927 crores, which is a rise of 9%. Revenue jumped by 10% to Rs 15206 crores during the year. Consolidated EBITDA jumped by 22% for Q4FY24 to Rs 631 Crores and by 24% for the year to Rs 2323 Crores. The profit before exceptional items for the quarter soared by 12% to Rs 509 Crores, and for the year it improved by 24% to Rs 2023 Crores.

The Constant currency (CC) growth in the international business was 5%.

Sunil D'Souza, Managing Director & CEO of Tata Consumer Products said "We delivered good topline growth of 10% in FY24, but importantly an EBITDA growth of 24% and significant expansion in EBITDA margin. During the year, we recorded growth in India tea and salt businesses. Our premiumization agenda continues to progress well with the premium portfolio in both tea and salt showing good growth and contributing to an increasing share of the overall portfolio. Our growth businesses (Tata Sampann, RTD, Tata Soulfull, Tata SmartFoodz) continued their strong growth trajectory with a revenue growth of 40% in FY 24. Tata Starbucks made consistent progress in its expansion agenda with a store footprint spanning 61 cities."

"We also delivered strong performance in our International markets, along with significant margin improvement. The UK business saw its EBITDA margin touch historic highs led by restructuring initiatives taken during the year. In India, we solidified our Sales & Distribution infrastructure; our total reach has expanded to 4 million outlets as of March '24. We implemented split routes in all 1 million + population towns and have seen significant improvement in assortment and growth. We are strengthening our Rurban focus and are deepening reach into rural areas. Alternate channels (modern trade and e-commerce) recorded significant momentum and continue to be strong growth drivers," Sunil D'Souza added.

"We significantly accelerated innovation momentum to cater to key consumer trends such as Health & Wellness, Premiumisation and Convenience. On an average, in FY 24, we launched a new product almost every seven days. There has been a step change in our Digital Transformation agenda with the launch of a best-in-class commodity procurement platform as well as a Go-to-market platform leveraging AI. This will enable greater agility; better decision making and help drive business growth. Our recently announced acquisitions- Capital Foods and Organic India will be significant value creators for the company, enabling expansion into high growth, high margin categories. The front end and back-end integration for Capital Foods was completed within 60 days of transaction close. The transaction for Organic India closed on 16th April and we will focus on fast tracking integration of the business to unlock value," he further commented.

Tata Consumer Products Share Price Target

Mandar Bhojane - Equity Research Analyst at Choice Broking said, on April 24th, 2024, TATACONSUM traded at Rs 1116.30, marking a 5% decline. The stock exhibits a robust demand zone around the Rs 1080 level, suggesting the potential for further correction. If a bullish reversal is observed within this buying zone, it is advisable to consider purchasing during market corrections around levels of Rs 1095 and Rs 1087.

Moreover, TATACONSUM is positioned above key Exponential Moving Averages (EMAs), including the 100-day and 200-day EMAs, indicating a bullish sentiment and the possibility of sustained upward movement in price. The Relative Strength Index (RSI) currently stands at 43.9. The convergence of these technical indicators suggests that TATACONSUM may have the potential to reach a target price of Rs 1200 if it crosses the Rs 1140 level in the near term.

To effectively manage risk, it is recommended to implement a stop-loss (SL) at Rs 1080. This precautionary measure is essential to protect investments in the event of an unforeseen market reversal.

In summary, considering the technical analysis and prevailing market conditions, TATACONSUM presents an attractive buying opportunity for those targeting a Rs 1200 price objective, provided prudent risk management measures are in place.

Disclaimer

The recommendations made above are by market analysts and are not advised by either the author, nor Greynium Information Technologies. The author, nor the brokerage firm nor Greynium would be liable for any losses caused as a result of decisions based on this write-up. Goodreturns.in advises users to consult with certified experts before making any investment decision.