Tata Consumer: Listen In: What makes Tata Consumer more resilient than peers

Hi there, Good Morning. Welcome to ETMarkets Morning, the show about money, business and markets. I am Nikhil Agarwal. Let’s start with the headlines first.

Omicron spreading at rapid rate, warns WHO
RBI comes out with PCA framework for NBFCs
Lenskart on verge of closing $250 million funding round at $5 billion valuation
Crypto Bill may not be introduced in winter session

Now lemme give you a quick glance on the state of the markets.

Asian stocks traded mostly higher on Wednesday, partly supported by bargain-hunting as investors awaited the US Federal Reserve’s monetary policy decision later in the day. MSCI’s index of Asia-Pacific shares outside Japan was flat, up by 0.03 per cent.

Elsewhere, the yield on 10-year Treasuries held at 1.44%. The US dollar rose again on Tuesday after rebounding from a dip that nearly wiped out its gains from the day before as markets jostled with the different paths major central banks are choosing between fighting inflation or the economic drag of the pandemic.

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That said, here’s what is making news.

The stock of Tata Consumer Products has lost 16 per cent over the past three months amid the rising pressure of raw material costs on the fast-moving consumer goods (FMCG) companies. However, the company showed better resilience during the September quarter by not missing the earnings estimates when compared with most of the top peers. The company has several triggers for the medium and long term which are likely to aid future growth. Tea prices are down almost 40 per cent from the peak in August. Gains from this will start showing from the December quarter while most other peers continue to grapple with high raw material costs of palm oil, wheat, sugar and dairy.

Amid steep valuations, uncertainty over the omicron variant, and subsequent lockdowns, and a 6% correction in the Nifty in November, fund managers bought into defensive sectors like IT and Pharma. They also picked specific mid- and small-cap stocks with earnings visibility. Among pharma stocks, fund managers found comfort in Laurus Labs and Alembic Pharma.

The Reserve Bank of India may be forced to raise interest rates at a faster pace than anticipated earlier as it would be forced to catch up with accelerating price pressures. The central bank may have to raise rates by as much as 100 basis points, up from 75 bps earlier as price rise spreads to services and consumer goods companies see 15 to 21 percent jump in their input costs.

NOW Before I go, here is a look at some of the stocks buzzing this morning…

Bharti Airtel said it is collaborating with Capgemini to bring 5G-based enterprise grade solutions to the Indian market. Under the partnership, the two companies will bring together their experience in connectivity and 5G solutions, and system integration capabilities, to develop a range of India-focused use cases.

ITC Ltd chairman Sanjiv Puri has said the company is open to the idea of demerger of the fast moving consumer goods (FMCG) business and listing of the information technology (IT) businesses, while the conglomerate has not shelved the demerger plans for the hotel business which will be done as soon as the industry recovers.

Aditya Birla Group has acquired the India and Southeast Asian distribution and manufacturing rights for the Reebok sports brand. A joint press release by Aditya Birla Fashion and Retail (ABFRL) and US-based Authentic Brands Group (ABG) said the BSE-listed company has signed a “long-term licensing agreement.”

SBI said it has raised Rs 3,974 crore by issuing Basel III compliant bonds to subscribers.

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Do also check out over two dozen stock recommendations for today’s trade from top analysts on ETMarkets.com.

That’s it for now. Stay with us for all the market news through the day. Happy investing!

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