Tata Global Beverages - 4QFY2013 Result Update - Angel Broking

For 4QFY2013, Tata Global Beverages (TGBL) posted a 7% yoy growth in its operating profit. We maintain our Neutral view on the stock.

Key highlights: TGBL posted a 5.0% yoy growth in its top-line to Rs. 1,811cr for 4QFY2013, which is in line with our estimates. The top-line growth was aided by an improved operational performance in its South Asian operations and a favorable foreign currency translation impact. The tea business posted a 6.9% yoy growth in top-line to Rs. 1,367cr, aided by a strong performance in the Indian and Australian markets. The coffee business posted a 5.8% yoy growth in sales to Rs. 460cr. The OPM rose marginally by 18bp yoy to 10.2%, aided by a 246bp yoy increase in gross margins. While the tea business posted a 7.7% yoy growth in its profits, the coffee business posted a 38.6% yoy growth in profits, aided by a significant increase in profits in the United States.

Outlook and valuation: TGBL derives ~65% of its revenue from overseas operations. We expect the company to perform well in its South Asian, Canadian and Australian markets. Over FY2013-15, we expect the company to post a CAGR of 11.0% and 14.6% in its top-line and bottom-line, respectively. At the current market price, the stock is trading at 17.0x FY2015E earnings. We maintain our Neutral view on the stock.

Source : Equity Bulls

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