Tata Consumer up 4%, hits new high on inclusion in Nifty50 from March 31

Shares of Tata Consumer Products hit a record high, up 4 per cent, of Rs 654 on the National Stock Exchange (NSE) in intra-day trade on Wednesday after the exchange said the Tata group company will be included in the Nifty50 index from March 31.

The stock surpassed its previous high of Rs 646 touched on February 17. The Tata group company engaged in the tea & coffee business will replace state-owned Gail India. Shares of Gail India were trading 2 per cent lower at Rs 144, as compared to a 0.31 per cent rise in the Nifty50 index at 09:24 am.

Tata Consumer, formerly known as Tata Global Beverages, will join FMCG peers such as Hindustan Unilever, Nestle India and Britannia in the widely-tracked Nifty 50 index. The move is expected to result in passive inflows of $89 million (Rs 650 crore) in Tata Consumer. Gail, on the other hand, could see outflows of $57 million (Rs 410 crore). READ MORE

In the past one month, the stocks of Tata Consumer and Gail have outperformed the market by gaining 11 per cent, against a 2.3 per cent rise in the Nifty50 index.

Brokerage Motilal Oswal Financial Services has a ‘buy’ rating on Tata Consumer (TCP) with a target price of Rs 661 per share. TCP has two strong legs in the India business – Tata Tea and Tata Salt – by which it is targeting lower double-digit growth, driven by cross-selling between Tata Chemicals and TCP’s distribution channels and expansion into new geographies.

Commenting on Gail, MOSL said that with ever-increasing gas demand in the country, transmission pipelines would play a critical role in connecting consumers with both imported and domestically produced gas. "With the stock trading at discount to long-term 1-year forward P/E of 13x, Gail offers an excellent investment opportunity," the brokerage firm said. It has a ‘buy’ rating on the stock with a target price of Rs 165 per share.

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