Why TCPL Stock is Falling? | Yadnya Investment Academy

The stock of Tata Consumer Product Limited (TCPL) has continuously fallen over the past few days. What are the possible reasons behind this fall in the stock price of TCPL? Read this blog to know more about this downfall and what a Shareholder should do If he/she has invested in this Stock.

Introduction:

Tata Consumer Products Limited (TCPL) is one of the leading companies of Tata Group. TCPL is engaged in the business of Food & Beverages. Recently, Stock prices have witnessed a heavy and continuous downfall. So. Let’s discuss the reasons behind this downfall in stock prices of TCPL.

About TCPL :

• TCPL is into India's business of Beverages which is into the Tea business specifically.
• If we see consolidated revenue of TCPL it has generated revenue worth Rs 3000 Cr. in Q4FY21.
• In which India Beverages contributed Rs. 1205 Cr and International Beverages contribute Rs 875 Cr.
• It shows that out of the total revenue of the business, Beverage Business- Indian & International contributes almost 60%-65% to the revenue mix of the company.   

TCPL- India Beverages:

• India Beverages Business reported a growth in revenue of 60% YoY in the quarter ended 31^st March 2021. While, sequentially, the same is down by just 5% from Rs. 1,275 Cr. in Q3FY21 to Rs. 1,205 Cr. in Q4FY21.
• But the problem is Earnings before interest, taxes, and amortization(EBITA), where it has seen a fall of 40.2% YoY. The revenue earned is 60% but the operating profit has come down by 40.2% that is Rs 87Cr. in Q4FY20 to Rs. 52 Cr. in Q4FY21.
• In Q3 the revenue fall is hardly 5.5% if we consider India Business. But the Operating profit has come down to 34.1%. This has happened because of the increase in tea prices.
• The increased tea prices have not been passed to the consumers. But this trend will not continue.    

Conclusion:

As a Shareholder or investor if there is an investment in this company. Then there is no change in companies fundamental. For the long-term thought process, this company is having a good Long term plan, growth opportunity and consumer acquisition is also in its place. Such kinds of dips can bring good market opportunities for the shareholder.