This Tata Group stock has slowed down in five years; buy, sell or hold?

Investors in Tata Consumer Products Ltd have seen their returns diminishing constantly in the last five years. The Tata Consumer stock, which delivered 144% returns in the last five years managed to clock returns of 124% in three years. Subsequently, returns during a year turned negative with the script falling 14.63% during the period. The Tata Consumer Products stock is down 9% this year. It hit a low of Rs 697 today against the previous close of Rs 703.30 on BSE.  

At 2:27 pm, the stock fell 0.27% to Rs 701.40.  It’s trading 2% away from the 52-week low of Rs 685 hit on March 16, 2023. The stock touched a 52-week high of 861.35 on September 14, 2022.  

Total 0.13 lakh shares of the firm changed hands amounting to a turnover of Rs 89.17 lakh on BSE. Market cap of the firm stood at Rs 65,040 crore.   

In terms of technicals, the relative strength index (RSI) of Tata Consumer stock stands at 43.9, signaling it's trading neither in the overbought zone nor in the oversold zone. Tata Consumer stock has a one-year beta of 0.8, indicating low volatility during the period. Shares of Tata Consumer are trading lower than the 5 day, 20 day, 50 day, 100 day and 200 day moving averages. 

In the third quarter of the last fiscal, Tata Consumer reported a 25.63 per cent rise in consolidated net profit at Rs 364.43 crore against Rs 290.07 crore for the October-September period a year ago. Revenue from operations zoomed 8.29 per cent to Rs 3,474.55 crore during Q4 against Rs 3,208.38 crore in the corresponding period last year. Total expenses of the Tata group's FMCG arm rose 10.13 per cent to Rs 3,119.73 crore against Rs 2,832.68 crore earlier. 

Vaishali Parekh, Vice President - Technical Research at Prabhudas Lilladher said, “The stock has witnessed lacklustre performance in the past 6-7 months sliding from Rs 860 zone and recently showing signs of bottoming out near Rs 685 levels and indicating a pullback to slightly imporve the bias. But the stock very much requires a decisive breach above the Rs 735 zone to imporve the trend overall and expect for further rise till intial target of  Rs 765 of the important 200DMA level. Thereafter, further strengh can carry the stock to its next target of  Rs 820 level with currently stop loss to be maintained near Rs 680 level.” 

Abhijeet from Tips2tarde said, "Despite strong fundamentals including consistent ROCE and low debt to equity ratio, a higher inflationary environment has ensured no growth in operating margins and thereby a muted FY23 for Tata Consumer in terms of stock price returns. Technically, the stock looks bearish and a daily close below support of  Rs 715 could lead to target of Rs 690 in the near term. Strong resistance will be at Rs 731 on the Daily charts." 

Also read: Goldman Sachs says Paytm Q4 margin print may lift Street confidence, sees stock doubling in bull case scenario