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Tata Global hits 1-yr high on launch of Himalayan brand in US; Kotak retains add rating

The company has reported Q1FY18 consolidated net profit at Rs 143 crore against Rs 126.3 crore, in the same quarter last fiscal.

Shares of Tata Global Beverage touched 52-week high of Rs 189.25, gain 6.5 percent intraday Wednesday as the company is going to launch its Himalayan mineral water in US market.

"The company's premium natural mineral water brand Himalayan, will now enter the USA market in a phased manner, through an agreement signed by its subsidiary Tata Waters LLC, with Talking Rain Beverage Company Inc, the maker of Sparkling Ice flavored sparkling waters to distribute and market the brand," as per company release.

This agreement will give Himalayan the benefit of Talking Rain’s extensive go to market and execution capabilities in the US, which synergize well with company's product expertise and marketing capability, it added.

Ajoy Misra, Managing Director & CEO of Tata Global Beverage said “We’re happy to be partnering with Talking Rain Beverage Company for a phased launch of Himalayan in the US market."

"The strength of their distribution network and category expertise will help the brand make a strong foray into the US market," he said.

The company has reported Q1FY18 consolidated net profit at Rs 143 crore against Rs 126.3 crore, in the same quarter last fiscal.

The operating profit (EBITDA) increased at Rs 244.2 crore and EBITDA margin was up at 14.3 percent.

According to Kotak Securities the company's 1QFY18 performance was a mixed bag. The domestic (tea) business delivered a strong quarter, while promotional phasing in developed markets, currency headwinds and weak performance of Tata Coffee dragged consolidated performance.

The company’s increased focus on exiting loss making businesses (China/Russia), restructuring stressed markets (like Poland) and on cost-saving initiatives; this coupled with lower interest costs drives 5-7 percent upgrade in its EPS estimates.

The broking firm retained its add rating with revised target of Rs 200 per share from earlier Rs 160.

At 10:03 hrs Tata Global Beverage was quoting at Rs 188.80, up Rs 10.10, or 5.65 percent on the BSE.
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