Shares of Tata Consumer Products soared to an all-time high on Friday following the announcement of its merger with Tata Coffee effective January 1. The surge propelled the stock’s market capitalization beyond ₹1 lakh crore, making it the seventh Tata Group company to achieve this milestone, joining the ranks of Tata Motors, TCS, Titan, Trent, Tata Steel, and Tata Power.
The stock’s remarkable performance in 2023, witnessing a 41% surge, marks its best annual growth since 2020, maintaining a consistent positive annual return for five consecutive years. Tata Consumer Products implemented strategic changes, such as the integration of Tata Chemicals’ food business, streamlining distribution chains, and simplifying international structures, including Tata Coffee’s holding structure.
Key developments include the acquisition of the remaining 50% stake in the NourishCo Beverages JV with PepsiCo, the addition of Dhunseri Tea and Soulfull to its portfolio, and the launch of the Foods range under the Sampann brand. The company’s expansion of Starbucks, introduction of Himalayan and Copper+ Waters, and strengthening distribution infrastructure have also contributed to its success.
These strategic initiatives have significantly enhanced Tata Consumer’s revenue, margin, and return ratios over the past five financial years. With a cash balance of ₹2,500 crore earmarked for future acquisitions, the company’s potential acquisition plans, NourishCo and Foods business growth, and international margin improvements are crucial aspects to monitor in the coming months.
Tata Consumer Products shares are currently trading with a gain of over 4% at ₹1,085, reflecting the positive market sentiment following the merger announcement.