Real-time Stock quotes, portfolio, LIVE TV and more.
Jun 13, 2011, 11.37 AM IST
Greshma Research is bullish on Tata Global Beverages and has recommended buy rating on the stock with a target of Rs 105 in its June 2, 2011 research report.
“Tata Global Beverages’ revenue increased from Rs 5,820.92 crore in FY10 to Rs 6,004.54 crore in FY11, which is an increase of 3.15% on a YoY basis The EBITDA stood at Rs 608.04 crore (FY2011) as compared to Rs 721.64 crore in FY10, which is a fall of 15.75% on a YoY basis. The EBITDA Margins fell from 12.39% in FY10 to 10.12% in FY11.The reason for this 15.75% fall in the EBITDA was mainly the increased cost of raw materials. The expenditure on raw materials rose by 11% from Rs 2,070.69 crores in FY10 to Rs 2,305 crore in FY11.The PAT stood at Rs 292.04 crores in FY11 as compared to Rs 393.31 crores in FY11, a decline of 25.05% on a YoY basis.
Tata Global Beverages has put immense amount of weight behind building its brands and emphasized on maintaining its existing ones, specially the legendary Tetley brand. The company has already invested in its core brands and is set to reap its benefits. Coupled with brand image and its vast portfolio which is set to grow with its new Joint Ventures, we forecast a steady rise in its margins.
We expect an EPS of Rs 5.44 in FY12E and valuing the company at 19.3 times arrive at our Price Target of Rs 105. Maintain BUY with a 15% upside from CMP of Rs 91. At CMP, the stock trades at 16.72x FY12E EPS. Global tea prices remained firm in FY11 despite increase in production in key export markets such as Kenya (up 27% in CY10) & Sri Lanka (up 13% in CY10). In CY11, tea production in south Asia is flat India & Sri Lanka, down 24% YoY in Kenya for 3mCY11). We expect tea prices to consolidate at current levels. We believe TGBL can improve its margins in FY12E by benefiting from the decline the tea prices & earlier price hikes. We Maintain a BUY on the stock,” says Greshma Research report.
Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own, and not that of the website or its management.Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
To read the full report click here
Action in Tata Global Beverage
Jun 18 2013, 10:41
- in FII View
Jun 18 2013, 10:41
- in Stocks Views