Friday, January 17, 2014

Tata Global Beverages Limited : Fair value 30 to 50

Dear Mahesh Kaushik jee, Namaskar, Please let me know your valuable suggestion for Tata Global brev. Thanks in advance ask by Manoj ji 
1.Tata Global Beverages Limited is a 1 rupee face value tea and coffee stock currently traded at 146.50 
2. Year high of Tata Global Beverages Limited is 170.20 and Year low 122 stock traded at 146.50 so this situation is normal. 
3. Promoter holding is 35.10 % and they slightly reduce their holding from 35.20 % , I dislike reducing in promoter holding even if it is ignoble low. 
4. FII Holding in Tata Global Beverages Limited is 21.23 % and FII increase it from 17.85 % , this is good.
5. Tata Global Beverages Limited is a dividend paying stock which give 2 to2.15 rupee per share dividend every year. 
6. In base of above 5 point i am not reaching on any clear decision so now i check net revenue per share ( NRS ) for making a decision about my view. 
7. Net revenue per share of Tata Global Beverages Limited is near 37-38 per share so i think currant market price 146 is very high in respect of 37 rupee net earning per share and i think fair market value for this stock is 30 to 50 
8. New reader who not believe this please read my earlier view about SKS Micro-finance ltd here
9. So my view is negative for Tata Global Beverages Limited and i have no any share of Tata Global Beverages Limited.


  1. Dear Sir,
    Me Lalit Jain wants to invest 10000/- rs. in stock market. So kindly give me suggesation to stock in which i should invest for good return in one year,
    Its my first time investment.

    Thanking You.

  2. Mahesh Ji,

    With due respect I am requesting you to re-valuate TATA GLOBAL BEVERAGE. I will be lucky enough to buy this share @ Rs.110. Be it stocks or any other asset class, investors find it easiest to judge them on face value. Assets like cash, investments and fixed assets are the most conspicuous on the balance sheet of listed companies. Hence companies loaded with these in their balance sheet find many takers. Even when it comes to discerning investors with an eye for valuations, the earnings per share and book value per share is typically what is scrutinized.

    Now, the intrinsic value of a stock must take into account the earnings potential of the business as a going concern under normalized circumstances. However, for companies that have intangible assets and off balance sheet items, one needs to reckon the possibility of these proving to be a valuation dampener.

    Tata Global Beverages Ltd (TGBL) is one company that has seen intangible assets being a drag on its valuations. The company has transformed itself from a tea plantation company to the second largest tea brand in the world in less than 40 years of its operation. TGBL is present in 70 countries and is the largest selling tea brand in India & Canada and among leading tea brands in the US, UK and Australia. However the company's turnover ratios and return ratios continue to be burdened by goodwill in its balance sheet. The brand which TATA GLOBAL is building since past decades will pay off its investors in days to come.

    1. Thank you kkd sir for your detail and frank comment, i respect your view but i not change my view and wait a lower price . regards


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