Tata Consumer Products saw its stock price drop over 8%, 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.
Key Factors Behind the Stock Drop:
- Year-over-Year Performance: Tata Consumer Products delivered a 12.87% increase in revenue and a 7.74% rise in profits for Q2 compared to the same period last year. While these numbers reflect growth, the market sentiment has been swayed by other factors.
- Quarter-over-Quarter Performance: Despite year-over-year growth, the company reported a 3.16% decline in revenue compared to Q1 FY24, though profits surged by 25.52%, highlighting margin improvements and effective cost control measures.
- Market Sentiment: The mixed quarterly performance, especially the sequential drop in revenue, has raised concerns among investors. This negative sentiment contributed to the stock’s sharp decline today.
- Negative Brokerage Reactions:
- Jefferies downgraded the stock, pointing to “another weak quarter” for Tata Consumer’s India business, citing margin pressures and slower volume growth.
- Morgan Stanley flagged challenges in the tea business, which led to weaker-than-expected earnings.
- Nomura raised concerns about the company’s 3.16% revenue decline on a quarterly basis, attributing it to a slowdown in some key segments.
The combination of these factors has led to Tata Consumer Products’ stock plummeting by over 8% today, trading at ₹1,000.15 as of 10:11 AM. Investors are cautious about the company’s ability to navigate these challenges and deliver consistent growth in the coming quarters.
Disclaimer: This analysis is for informational purposes only and should not be taken as financial advice. Please consult with a financial advisor before making any investment decisions.
