Tata Consumer Products: Seventh Tata Group company to cross ₹1 lakh crore in market cap

Shares of Tata Consumer Products are trading at a record high on Friday after it announced that Tata Coffee will merge with the company from January 1.

With today's surge, the stock also crossed the ₹1 lakh crore market capitalisation mark, becoming the seventh Tata Group company after Tata Motors, TCS, Titan, Trent, Tata Steel and Tata Power.

The stock is also up 41% so far in 2023, marking its best annual performance since 2020. Shares have delivered positive annual returns for five years at a stretch.

Some of the important structural changes that the company has made over the last few years include amalgamating the food business of Tata Chemicals, thereby taking the iconic Tata Salt into its own fold.

Additionally, it has rationalized its distribution chains and simplified its international structure, along with simplifying the holding structure of Tata Coffee.

Tata Consumer also acquired the remaining 50% stake of PepsiCo in their JV company NourishCo Beverages for ₹13 cror in March this year.

Acquisition of Dhunseri Tea, Soulfull, Tata's smart foods business and the launch of its Foods range under Sampann are some of the other steps taken by the company.

An additional kicker was provided to the stock courtesy of Himalayan and Copper+ Waters, continued expansion of Starbucks and improving & increasing distribution infrastructure.

All of these moves have resulted in a significant improvement in the company's revenue, margin and return ratios over the last five financial years.

The company also has a cash balance of ₹2,500 crore on its books for further acquisition plans.

Potential acquisition, growth in the NourishCo and Foods business and improvement in international margins are some of the key aspects to watch out for going forward.

Tata Consumer Products shares are trading with gains of over 4% at ₹1,085.