Tata Group shares gain; Tata Global, Tata Chem, Tata Coffee hit 52-wk highs

Shares of Tata Group companies were in focus and rallied up to 7 per cent on the BSE on Tuesday in an otherwise subdued market.

Tata Global Beverages (up 8 per cent at Rs 381), Tata Coffee (up 5 per cent at Rs 103) and Tata Chemicals (up 4 per cent at Rs 733) hit their respective 52-week highs on the BSE in intra-day trade today.

Meanwhile, Tata Consultancy Services (TCS), Tata Steel, Tata Investment Corporation, Tata Metaliks, Tata Elxsi, Tinplate Company, Tata Steel Long Products and Tata Communications were up in the range of 1 per cent to 6 per cent on the BSE. In comparison, the benchmark S&P BSE Sensex was down marginally by 0.01 per cent at 41,857 points at 10:14 am.

Among individual names, Tata Global Beverages and Tata Chemicals extended their past one week rally today after the National Company Law Tribunal (NCLT) approved the scheme of arrangement between the two companies.

In May last year, Tata Group had decided to demerge consumer business of Tata Chemicals and merge it with Tata Global Beverages. Tata Global Beverages will be renamed as Tata Consumer Products, the group had announced.

Under the scheme, every shareholder of Tata Chemicals will get 1.14 new equity shares of Tata Global Beverages for every one equity share held in Tata Chemicals. It means that shareholders having 100 shares in Tata Chemicals will receive 114 shares in Tata Global Beverages.

The management said the combination of the two consumer-focused businesses will benefit both sets of shareholders who will be able to participate in a larger business poised to grow their share of the foods & beverages market with a broader exposure to the attractive and fast growing FMCG sector. Meanwhile, benign tea, coffee prices and cost-comparator are likely to drive strong earnings growth for Tata Global Beverages.

Tata Steel was up 2 per cent at Rs 506, extending its previous day’s 2 per cent gain, after the company announced successful refinancing of 1.75 billion euros of European debt. The company on Monday announced that Tata Steel Netherlands Holdings B.V. ("TSNHBV"), a 100 per cent subsidiary of Tata Steel, has executed agreements for the refinancing of its bank debt.

TCS too was up nearly 2 per cent at Rs 2,230. The company is expected to release its October-December quarter (Q2FY20) results on Friday, January 17, 2020.

TATA GLOBAL 377.00 352.90 6.8
TATA INV.CORPN. 864.00 813.10 6.3
TINPLATE CO. 158.50 153.65 3.2
TATA METALIKS 675.90 657.55 2.8
TATA STEEL BSL 32.30 31.45 2.7
TATA ELXSI 913.20 891.20 2.5
NELCO 245.25 239.35 2.5
TATA CHEMICALS 720.75 704.70 2.3
TATA STEEL LONG 461.70 451.80 2.2
AUTOMOTIVE STAMP 34.10 33.50 1.8
RALLIS INDIA 191.60 188.40 1.7
TATA STEEL 503.50 495.55 1.6
TATA COMM 428.30 421.55 1.6
TATA COFFEE 99.30 97.75 1.6
TCS 2220.85 2191.00 1.4
VOLTAS 697.55 693.55 0.6
TRF 131.40 130.85 0.4
TATA POWER CO. 59.60 59.40 0.3
TATA MOTORS-DVR 81.20 81.05 0.2
TATA MOTORS 196.60 196.25 0.2

Analysts at Dolat Capital expect TCS will report constant currency (CC) revenue growth of 1 per cent quarter on quarter (QoQ) in view of furloughs and sustained weakness in BFSI vertical.

“The operating profit margin (OPM) expected to improve 45bps QoQ on favourable forex and improved utilisation. PAT growth would be lower as forex gains in Other Income would moderate. The key commentary on sustenance of strong TCV signings and commentary on BFSI and retail vertical to be watched,” the brokerage firm said in a result update.

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