Tata Consumer Products Share Falls By 3% After Denying Deal Of 51% Stake Purchase In Haldiram's

Tata Group-backed consumer durables firm, Tata Consumer Products' share price dived by around 3% on Thursday after the company denied news related to a majority stake purchase to the tune of 51% in leading food maker Haldiram's.

This Tata stock is currently trading near its intraday low.

At the time of writing, Tata Consumer's share price traded at Rs 857 apiece on BSE, shedding 2.6%. The stock has dipped by 3% with an intraday low of Rs 853.85 apiece.

On the current market price, the company's m-cap is Rs 79,663 crore.

On the previous day, Tata Consumer's shares stood at Rs 879.90 apiece on BSE. When the deal buzz circulated, the stock gained by over 4%.

Stock exchanges had sought clarification from the company over a Reuters article titled " India's Tata seeks control of Haldiram's, snack maker wants $10 billion valuation".

Reuters reported that Tata Group's consumer unit is in talks to buy at least 51% of popular Indian snack food maker Haldiram's but is not comfortable with the $10 billion valuation sought, two people briefed on the matter said. If successfully concluded, a deal would see the Indian conglomerate directly compete with Pepsi and billionaire Mukesh Ambani's Reliance Retail.

However, later in the evening of September 6, Tata Consumer clarified that "the Company is not in negotiations as reported in the above-referred news article."

In the June 2023 quarter, Tata Consumer reported that revenue from operations increased by 12% (11% in constant currency) as compared to the corresponding quarter of the previous year, mainly driven by strong growth of 16% in India Business, 3% (constant currency) in International Business and 5% (constant currency) in Non-Branded Business.

Also, in the quarter, profit before exceptional items and tax at Rs 495 crore is higher by 23% reflecting strong growth in the India-branded business and improved performance in International and Non-branded business. Group Consolidated Net Profit at Rs 338 crore is higher by 22%.

Going forward, in the Q1 results, Sunil D'Souza, Managing Director & CEO of the company said Tata Consumer will stay focused on driving profitable growth while making consistent progress in its transformation journey towards becoming a leading FMCG company.

In its latest research note dated September 6 for consumer staples, August month's performance, Kotak Institutional Equities highlighted that Tata Consumer launched Himalayan Elevation Kashmiri Saffron, which will be available across India in select premium outlets, leading e-commerce channels, and Tata Consumer's own D2C platform, i.e., Tata Nutrikorner. The 1.0/0.5 gm pack of Himalayan saffron is priced at Rs650/Rs370.

Additionally, the brokerage cited that Tata Consumer launched 100% pure and unrefined cold-pressed oils under the Tata Simply Better brand with a range spanning from Rs325 to Rs699.

Following this, Kotak has given an 'ADD' rating on Tata Consumer for a fair value of Rs 870 apiece.