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Tata Consumer: 20% upside on the cards

Tata Coffee merger with Tata Consumer Products, TCPL Beverages set for January 1

Tata Consumer Products (TCPL) has narrowed its product offerings by identifying five key categories for launches in the coming time. These categories represent the company's current core offerings, including tea, coffee, and salt. The pantry segment will explore opportunities in pulses, spices, staples, dry fruits, and ready-to-cook. In the liquids category, the company has recently introduced new products in the water and ready-to-drink sectors.

The mini-meals category will see TCPL expanding its offerings in the breakfast cereal, ready-to-eat, and snack markets, along with its protein platform, which includes plant-based meat and plant protein powders. Ajit Krishnakumar, chief operating officer of TCPL, explained the rationale behind this strategic approach, stating that it enables the company to develop a targeted understanding of its consumers, enhance its internal capabilities, innovate within established parameters, expand its total addressable market, and tap into new consumption occasions.

In late September, Tata Consumer Products launched the 'Say Never' Energy Drink, marking its entry into the rapidly growing energy drink category. The drink offers two invigorating variants: Red and Blue, each designed to provide a boost of vitality to those who dare to chase their dreams.

Tata Consumer Products has seen momentum in recent times following a breakout from a bullish Pennant pattern on monthly charts. The stock broke its previous high of Rs. 890 in October after testing levels many times. Tata Consumer Products hit a record high of Rs 940 on November 20 but failed to hold on to the momentum. The stock is currently trading above most of the crucial short- and long-term moving averages, which is a positive sign for the bulls. The daily Relative Strength Index (RSI) is at 67, with RSI below 30 being oversold and above 70 being considered overbought. The daily MACD is above its center and signal line, making a positive divergence on the daily chart and indicating a bullish indicator.

Tata Consumer Products Ltd. reported a net profit of Rs. 359.18 crore for the September quarter, with a 11% YoY increase in net revenue to Rs. 3,734 crore. The company's consolidated EBITDA for the quarter stood at Rs. 569 crore. The revenue of Tata's India Packaged Beverages business increased by 5%, while its volume increased by 3%. The company's Indian food business reported a 16% annual rise in revenue and 6% growth in volume, driven by its value-added salt portfolio, the expansion of the Tata Sampann brand, and the launch of new products, including cold-pressed oils. Nourisho Co. recorded a 25% revenue growth during the quarter under review, while Tata Gluco+ and Tata Copper+ continued their strong growth.

Traders can accumulate for a price appreciation of nearly 20% from the CMP of Rs. 925 in the long term.

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