InvestorQ : I am holding shares of Tata Global. After the sharp fall in profits seen in the fourth quarter, what should I be doing?
swati Bakhda made post

I am holding shares of Tata Global. After the sharp fall in profits seen in the fourth quarter, what should I be doing?

Answer
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Dia Deshpande answered.
1 year ago


Looking at the results of TGBL for fourth quarter

Total income for TGBL was up by 6% at Rs.1811 crore in the fourth quarter. However the profits for the quarter near halved to Rs.36 crore. However, it needs to be noted that the tax expenses in the previous quarters were muted due to tax credits and that was the reason the expenses looked elevated in the current quarter. This may be more of a one-off problem.

Should I hold on to TGBL or should I sell out?

We do believe that as a pedigreed FMCG play, TGBL may still be undervalued in the market. It is available at a P/E ratio of just 24 as against most other FMCG companies quoting at P/E ratio of 50-60. While the coffee business has been under pressure in the quarter, the tea business has been extremely robust. Also the stock corrected nearly 40% from the peaks and has just about turned around. If you are long on the stock, you can look to hold and even add some more at lower levels considering the valuation comfort that it offers to shareholders. It can emerge as a very strong play on the Indian consumer story in the medium to long run.