Tata Consumer Products saw its stock price drop by 6.69%, reaching ₹1,020.15 as of 9:24 AM today, following the release of its Q2 FY24-25 results. Despite a 12.87% year-over-year (YoY) increase in topline revenue and a 7.74% rise in net profit, the stock took a hit due to concerns over a 3.16% revenue decline compared to the previous quarter.
Stock Price Details:
- Open: ₹1,047.00
- High: ₹1,059.45
- Low: ₹1,018.95
- Previous Close: ₹1,093.25
Key Factors Behind the Stock Drop:
- Q2 Results Overview:
- Year-over-year performance: Tata Consumer’s Q2 results showcased a 12.87% increase in revenue and a 7.74% rise in profits compared to the same period last year.
- Quarter-over-quarter performance: Compared to Q1 FY24, the results were more mixed, with revenue declining by 3.16%. However, profits surged by 25.52%, indicating cost control and margin improvements.
- Market Sentiment: Despite the positive year-over-year growth, the quarter-over-quarter revenue decline has led to concerns among investors, contributing to the stock’s sharp fall.
- Negative Brokerage Reactions: Several brokerages have expressed concerns over Tata Consumer’s mixed quarterly performance:
- Jefferies: Downgraded the stock, citing “another weak quarter” for the India business, with margin pressures and slower volume growth.
- Morgan Stanley: Pointed out the company’s challenges in the tea business, leading to weaker-than-expected earnings.
- Nomura: Highlighted concerns over the company’s 3.16% revenue decline on a quarterly basis, attributing it to a slowdown in certain key segments.
Market Reaction:
After opening at ₹1,047.00, Tata Consumer Products’ stock quickly fell to a low of ₹1,018.95, reflecting a 6.69% drop. The stock’s decline is driven by mixed reactions to the quarterly performance and cautious views from brokerages. As of 9:24 AM, the stock is down ₹73.10, trading at ₹1,020.15.
Tata Consumer Products delivered a robust year-over-year performance in Q2 FY24-25, with 12.87% topline growth and 7.74% profit growth. However, the 3.16% sequential decline in revenue has led to a 6.69% drop in the stock price, as negative brokerage reactions and concerns over key segments weigh on investor sentiment. The company’s ability to navigate these challenges will be crucial for its future performance.
Disclaimer: This article is for informational purposes only and should not be construed as financial advice. Please consult a financial advisor before making any investment decisions.
