InvestorQ : Why are the shares of Tata Consumer appreciating so rapidly in the markets?
shrinidhi Rajan made post

Why are the shares of Tata Consumer appreciating so rapidly in the markets?

Answer
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3 weeks ago


One can say that the stock of Tata Consumer Products, formerly Tata Global Ltd, has been consistently trading higher and the rally has been rapid in the last few days. The stock which also recently absorbed the salt business of Tata Chemicals has been on a tear.

If you look at the past 2 months, the stock price surged 46%. As a result, the total market cap of Tata Consumer Products has crossed Rs.53,000 mark and it has emerged as one of the most valuable companies in the Tata Group in terms of market cap.

Interestingly, at the current market cap, Tata Consumer is more valuable that two giants within the same group. It is ahead of Tata Steel which has a market cap of Rs.50,253 crore and Tata Motors which has a market capitalization of Rs.46,767 crore.

Tata Consumer reported growth in profit seven in the midst of a tough market condition. The operating margins or OPM of the company actually expanded by 312 bps on account of higher revenues, better price realization and sharp cuts in costs.

Tata Consumer has gained due to the increased in-home consumption in the last few months. Tata has also gained substantially from the shift from unbranded to branded products in tea, pulses, spices etc. It is also investing heavily in digital sales channels.