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Wednesday, December 5, 2012

Tata Global...High on Tea

For all those who love their morning cuppa brew here is a reason to cheer...
 
Tata Global formerly known as Tata Tea is a Kolkata headquartered subsidiary of the Steel to retail  Indian behemoth Tata Group.
 
It is the second largest manufacturer and distributor of tea and a major producer of coffee.It is India's version of an MNC with strong presence in the non-alcoholic beverages space.It became a recognisable name with the $430 million buyout of Tetley Tea of UK.In 2012 it formed a 50:50 JV with Starbucks for entry into India with flagship starbucks opening in Delhi and Mumbai.
 
I feel it has the potential to go much higher than CMP 165.A midterm target of INR 250 is quite possible given the growth trajectory followed.Jubilant Food-the master franchisee of Domino's Pizza and Dunkin Donuts for India,Pakistan,Sri Lanka,Bangladesh and Nepal has a market cap of 8000 crores with stock price of INR 235 whereas Tata Global has a market cap of 1000 crores?

5Year stock price movement

It means that the profit from the starbucks franchisee comes free for the investor who invests at the current market price of TGL(Tata Global).

The Book Value(BV)per share as of march 2012 was INR 35.74,adjusted EPS INR 3.55,GPM of 10.79% and a Dividend Payout Ratio(net profit) of 50.76 as per information available in the public domain.

For the serious investor who eschews the esoteric,the exotic new ideas,TATA GLOBAL happens to be an ideal investment for 2013.