AnandRathi's research report on Tata Global Beverage
"Tata Global Beverage’ international operations, housed in Tetley, comprise 45 percent of its turnover and 28 percent of its EBIDTA. A disproportionately large portion of the tea sold by Tetley consists of black tea (~85 percent), largely sourced from Kenya. Despite challenges in several mature international markets, we believe growth will be effected through the focus on value-added products and strategic price increases. Simultaneously, efficiencies should be extracted from the operational setup. At the ruling price of Rs 135, the stock trades at a P/E and EV/EBIDTA of 17.7x and 8.6x respectively, discounting its FY14e figures. We maintain our recommendation to Buy, with a price target of Rs 168," says AnandRathi research report.
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