Monday, May 20

Tata Consumer Shares Surge by 4% as Company Addresses Speculation About Haldiram’s Stake Sale

Tata Consumer Shares Surge by 4% as Company Addresses Speculation About Haldiram’s Stake Sale


Tata Consumer Shares Surge Near 52-Week High Amidst Haldiram’s Stake Acquisition Speculations

Shares of Tata Consumer Products Ltd saw a significant rise, climbing by 4.40%, nearly reaching their one-year high level. The stock reached an intraday high price of Rs 883, just 0.10% below its 52-week high of Rs 883.85, recorded on July 26 this year. It eventually closed 4.04% higher at Rs 879.90. This surge followed reports that Tata Consumer is in discussions regarding a potential stake acquisition in Haldiram’s.

 

Tata Consumer Shares Surge by 4% as Company Addresses Speculation About Haldiram's Stake Sale
Tata Consumer Shares Surge by 4% as Company Addresses Speculation About Haldiram’s Stake Sale

 

According to sources, Tata Consumer is in talks to acquire at least 51% of the renowned food maker Haldiram’s, although it expressed discomfort with the $10 billion valuation being sought. Haldiram’s has also been in discussions with private equity firms, including Bain Capital, regarding the sale of a 10% stake.

In response to these reports, stock exchanges BSE and NSE sought clarification from Tata Consumer. The company issued a statement denying the reported negotiations and stated that it regularly evaluates various strategic opportunities for business growth and expansion.

Haldiram’s holds nearly 13% of India’s $6.2 billion snack market, as reported by Euromonitor International. Additionally, Pepsi, known for Lay’s chips, has a similar share in the market.

Haldiram’s snacks are also sold in international markets such as Singapore and the United States, and the company operates approximately 150 restaurants offering local and western cuisine.

Currently, Tata Consumer, the owner of UK tea company Tetley, has a partnership with Starbucks in India.

Technically, Tata Consumer’s stock is trading above various moving averages, and its 14-day relative strength index (RSI) stands at 65.29. A level below 30 indicates oversold conditions, while above 70 suggests overbought conditions. The company’s stock has a price-to-equity (P/E) ratio of 78.36 and a price-to-book (P/B) value of 6.16.

Analyst data indicates a target price of Rs 932 for the stock, implying a potential upside of 6%. The one-year beta of the stock is 0.93, suggesting low volatility.

In broader market movements, Indian equity benchmarks extended their gains for the fourth consecutive session, with consumer, pharmaceutical, and energy stocks leading the way. The BSE Sensex rose by 100 points (0.15%) to close at 65,881, while the NSE Nifty increased by 36 points (0.18%) to end the session at 19,611.


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