Tata Consumer shares climb 4%; company clarifies on Haldiram's stake sale buzz

Shares of Tata Consumer Products Ltd rose on Wednesday to trade near their one-year high level. The stock surged 4.40 per cent to hit an intraday high price of Rs 883. At this price, the scrip was just 0.10 per cent away from its 52-week high of Rs 883.85, seen on July 26 this year. It eventually settled 4.04 per cent higher at Rs 879.90. Today's sharp upward move came after it was reported that the Tata Group's consumer unit is in talks to pick up a stake in Haldiram.

Tata Consumer is in talks to buy at least 51 per cent of popular food maker Haldiram's but is not comfortable with the $10 billion valuation sought, news agency Reuters reported citing sources familiar with the development. The news agency also mentioned that Haldiram's is also talking with private equity firms including Bain Capital about the sale of a 10 per cent stake.

Stock exchanges (BSE and NSE) have sought clarification from Tata Consumer with reference to the agency news. In response, the company said it is not in negotiations as reported in the referred news article.

"There is no impact of this article on the company. We would like to add that the company evaluates various strategic opportunities for growth and expansion of the business of the Company, on an ongoing basis. We will make appropriate announcements in compliance with the obligations under Sebi (LODR) Regulations, 2015, as and when any such requirement arises," it stated.

Haldiram's has almost 13 per cent share of India's $6.2 billion snack market, according to Euromonitor International. Separately, Pepsi, which is famous for its Lay's chips, also has around 13 per cent in the select market space.

Haldiram's snacks are also sold in overseas markets like Singapore and the United States. The company has around 150 restaurants selling local food, sweets and western cuisine.

At present, Tata Consumer, which owns UK tea company Tetley, has a partnership with Starbucks in India.

On technical setup, the Tata Group counter was last seen trading higher than the 5-day, 10-, 20-, 30-, 50-, 100-, 150-, 200-day simple moving averages (SMAs). The counter's 14-day relative strength index (RSI) came at 65.29. A level below 30 is defined as oversold while a value above 70 is considered overbought. The company's stock has a price-to-equity (P/E) ratio of 78.36 against a price-to-book (P/B) value of 6.16.

The scrip has an analyst target price of Rs 932, Trendlyne data showed, suggesting a potential upside of 6 per cent. It has a one-year beta of 0.93, indicating low volatility on the counter.

Meanwhile, Indian equity benchmarks settled higher for the fourth straight session, led by gains in consumer, pharma and energy stocks. The 30-share BSE Sensex pack rose 100 points or 0.15 per cent to settle at Rs 65,881, while the broader NSE Nifty moved 36 points or 0.18 per cent up to end the session at 19,611.

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