Tata Global Beverages Q2 net fails to meet expectations, shares tank

Shares of Tata Global Beverages on Wednesday slumped almost 9 per cent after the company's quarterly results failed to meet market expectations.

The Tata Group company on Tuesday reported a 51.23 per cent increase in consolidated net profit to Rs 180.03 crore for the second quarter ended September 30. It had posted a net profit of Rs 119.04 crore for the same period of previous financial year.

Its net sales during the July-September quarter rose to Rs 1,906.23 crore, compared to Rs 1,842.57 crore during the same period of previous financial year.

The company's results were announced post market hours on Tuesday.

Reacting to the news, shares of Tata Global Beverages fell sharply by 8.6 per cent to Rs 141.35 on the Bombay Stock Exchange. On the National Stock Exchange, it tanked 8.7 per cent to Rs 141.10.

"For Q2 FY14 Tata Global Beverages performance was below estimate on the top-line and bottom-line front," said V Srinivasan, Research Analyst - FMGC, Angel Broking.

The company on Tuesday also announced merger of its subsidiary Mount Everest Mineral Water with Tata Global Beverages.

"The boards of directors of Tata Global Beverages Limited (TGBL) and Mount Everest Mineral Water Limited (MEMW) in their respective meetings today, approved a proposal to merge MEMW with TGBL," it had said in a statement.

Analysts said the decision also weighed on investor sentiment.

"Merger of Mount Everest is considered negative, so the stock is facing selling pressure," said Kishor Ostwal, CMD, CNI Research.

With inputs from PTI