Stock Tips: Golden chance of 31% return in this stock of Tata Group, shares are available at 20% discount

Stock Tips: There is a great opportunity of 31 percent profit on investment in Tata Group’s listed consumer company. Shares of Tata Consumer have slipped about 5 percent this year, but now it is showing an upward trend. According to domestic brokerage firm ICICI Securities, Tata Consumer’s business will remain strong, due to which its buy rating is maintained. The brokerage firm has fixed a target price of Rs 925 per share for investing in it, which is today (June 23) at Rs 707.65, that is, you can earn about 31 percent profit from investing at the current price.

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Experts are placing bets because

• In the last financial year 2021-22, the business growth of Tata Consumer was good and the company launched many new products, due to which its market share is increasing.
• The company has acquired three companies Soulfull, Nourishco and Tata Q, due to which the company’s profits can increase in the financial year 2022-24.
• In the last financial year 2022, the expenditure on advertisements increased from 6.3 percent in the financial year 2021 to 6.8 percent but it is still less than the 7.7 percent in the financial year 2017-2020 before Corona.
• The market share of Tata Consumer is increasing continuously. Its market share in tea has increased by 1 percent and in salt by 4 percent.
• Its working capital increased to 71 days in FY 2022 as compared to 39 days in FY 2021 and free cash flow was also Rs 470 crore. Its core ROE (return on equity) also improved by 0.80 per cent to 13.7 per cent.
• For all these reasons, ICICI Securities has retained the buy rating of Tata Consumer. However, in the near term, the effect of trading volatility can also be seen on the stock and volatility can remain.

Shares are at 20% discount

Tata Consumer’s shares are currently at a discount of about 20 percent from the record level of 52 weeks. Last year, on September 7, 2021, its prices had reached a record 52-week level of Rs 889, but after that it started declining. Due to the war between Russia-Ukraine and the Corona epidemic, its shares were heavily sold and on 7 March 2022 slipped to a record low of 52 weeks of Rs 650.75. Right now its prices are at Rs 707.65 on the BSE, that is, there has been a recovery of about 8 percent in the price and according to market experts, it can reach a price of Rs 925, that is, investments at the current price can earn about 31 percent.

(The stock recommendations given in the story are those of the respective research analysts and brokerage firms. Financial Express Online takes no responsibility for the same. Investments in capital markets are subject to risks. Please consult your advisor before investing.)