FMCG has been an interesting space ever since the world is grappled with the pandemic. One of the stock which has been a recent addition to Quest algorithm is from this space.
Background:
This brand has solid presence across TEA , COFEE , LIQUID BEVERAGES , FOODS , READY TO EAT CATEGORY , it also owns Starbucks , indias largest coffee chain.With its brand pedigree and the digital push from the consumer based app TATA NEU the company is set to ride the growth path in India’s consumer market. TATA NEU will provide fashion , finance, gadgets to groceries, hotels to health, and tech to travel this will be very essential for TATA CONSUMER as the cost of customer acquisition will go lower and there will be better customer and product targeting using group’s technology for data science to understand consumer behavior. Also ,with the inclusion of easy payment gateways the boost from the digital channels will help the company to log in more orders and gather more consumer data.
Analysis
The company has been posting healthy numbers since last 8 quarters ( except one*) , and is slowly but steadily grabbing the market share from existing players. The net profit has stabilized in last 4 quarters and is looking healthy compared to its peers. In March 2021 company closed 8x more free cashflow than last year. FII’s have been steadily increasing their stake in the stock and hold almost 25% of the company. Technically the stock has seen new accumulation pattern and today the 50 DMA has crossed 200 DMA if this sustains for next few weeks then we are in new rally for this stock.
Recommendation
Buy TATA CONSUMER Above 807 keep multiple targets . 1st target 843 / 2nd Target : 910 / 3rd Target 1090. | Time Frame : 25 to 120 days.
