The market capitalization of Tata group has crossed $300 billion as shares of 27 of its 28 listed companies soared during the year, stock exchange data showed.
India’s largest conglomerate added a market value of $84.75 billion since the beginning of the year, on the back of share price gains ranging from 15% to 375% during the year.
Top 5 companies
Tata Consultancy Services was the top contributor to the gain, with its share of the group market cap at 52%, followed by Tata Steel Ltd (16.22%), Tata Motors Ltd (6.75%), Titan Co. Ltd (5.07%) and Tata Consumer Ltd (4.1%)
Six group companies have gained over 100% during the year, while nine climbed 50-90%. Twelve firms saw their share price rise 15-45%. Rallis India, the only stock in the group is trading nearly 1% lower, this year.
Analyst View
Analysts said Tata group stocks have surged this year as all its key group companies have survived the pandemic without any significant impact.
Group companies are also maintaining debt within acceptable levels, assuaging investors.
Improvement
The global luxury car recovery supported Jaguar and Land Rover, and consequently, its owner Tata Motors.
Similarly, the rebound in steel demand and commodity cost inflation supported Tata Steel.
Recovery in domestic consumption, improved operating leverage and various cost control measures supported improvement in profitability in its various businesses.
Intra stake acquisition
The group’s holding company Tata Sons invested ₹2,600 crore in Tata Power Ltd last year, increasing its stake from 35.27% to 45.21%.
The group also increased its shareholding in its unlisted airline business AirAsia India from 51% to 83.67% by purchasing a stake from its partner AirAsia Berhad.
Comment from Analyst
Mitul Shah, Reliance Securities, “Steady earnings growth enhanced investors’ confidence in the group and re-rating for group companies continued resulting in a strong uptick in stock prices.
We expect this positive traction would continue with ramp up in vaccination drive globally and better profitability for the group in FY23.”
Jitesh Ranawat, Marwadi Shares and Finance Ltd, “The focus has been on improving operational metrics and is to increase market share. The group’s focus has been sharper and delivering the outcome has been rewarded by the markets.
We stay overall positive on the group companies and would like to buy them at any good dips as they will be good long term investments.”
Press the 🔔 icon for notifications of all new updates
With inputs from Mint.
