Tata Consumer Shares Hit Record On Capital Foods, Organic India Acquisitions
TCPL will buy 75% stake in Capital Food for Rs 5,100 crore with the remaining to be bought over three years. In case of Organic India, the company will buy 100% stake for Rs 1,900 crore.
Shares of Tata Consumer Products Ltd. hit record high on Monday before falling after it inked deals to acquire Capital Foods Pvt. and Organic India.
TCPL will acquire 75% stake of Capital Food for Rs 5,100 crore. The remaining 25% stake will be acquired over three years. In case of Organic India, the company will buy 100% stake upfront for Rs 1,900 crore, according to exchange filings on Friday.
Citi Research said the acquisitions is likely to add 10% to FY25 sales in India, and 7% to consolidate sales. The acquisitions is expected to support TCPL's growth by 'addressing white spaces' in its portfolio, and drive premiumisation.
The brokerage maintained TCPL as its top picks in India consumer staples with a 'buy' rating.
TCPL's stock rose as much as 2.76% during the day to Rs 1,190.95 apiece on the NSE. However, it erased gains to trade 1.10% lower at Rs 1,146.25 per share as of 10:39 a.m., compared to 0.59% advance in the benchmark Nifty 50.
The share price has risen 52.98% in the last 12 months. The total traded volume so far in the day stood at 4.7 times its 30-day average. The relative strength index was at 75.1, implying that the stock may be overbought.
Nineteen out of 24 analysts tracking TCPL have a 'buy' rating on the stock, four recommend a 'hold' and one suggests 'sell', according to Bloomberg data. The average of 12-month analyst price targets implies a potential downside of 7%.
