Ratan Tata's holding subsidiary plans to expand globally; the company plans to invest Rs 450 crore for a 5500 MT capacity.

The stock has generated 1,631.56 per cent returns to its shareholders over its lifetime period.

Tata Coffee Ltd, India’s leading coffee producer, today announced that its wholly-owned subsidiary, Tata Coffee Vietnam Company Ltd, will establish an additional 5500 Metric Tonnes (MT) Freeze-Dried Coffee (FDC) facility in Vietnam. The new facility will significantly enhance the company’s FDC production capacity and cater to the growing demand for premium coffee products globally.

The decision to expand in Vietnam aligns with Tata Coffee’s strategic focus on expanding its global footprint and establishing itself as a leading player in the FDC market.

Key Highlights of the Capacity Expansion

• Existing capacity: 5000 MT
• Existing capacity utilization: 96 per cent
• Proposed capacity addition: 5500 MT
• Period within which the proposed capacity is to be added: 2 years (approx.)
• Investment required: USD 53.3 Million (approx. Rs 450 crores)
• Mode of financing: To be sourced from internal accruals and bank financing
• Rationale: To cater to growing demand for the Freeze-Dried product envisaged and saturation of existing capacity.

Q2FY24 performance of the company witnessed a decline, with the topline shrinking by 3.11 per cent and profits taking a substantial hit, decreasing by 60.18 per cent year-over-year. Compared to the preceding quarter, revenue experienced a slight dip of 0.67 per cent, but there was a positive turn in profits, rising by 19.42 per cent. However, this improvement was accompanied by an increase in Selling, General, and administrative expenses, which went up by 1.37 per cent quarter-over-quarter and 2.85 per cent year-over-year. The operating income also faced challenges, dropping by 16.31 per cent q-o-q and a significant 59.61 per cent Y-o-Y.

In today's day trading session, Tata Coffee Ltd displayed a relatively stable performance with a marginal uptick. Opening at Rs 276.45, the stock saw a high of Rs 280.5 and a low of Rs 276.25, ultimately closing at Rs 277.05. The incremental increase of 0.22 per cent from the previous close of Rs 276.45 suggests mild positive momentum.

About Company

Tata Coffee Ltd is primarily engaged in the production, trading and distribution of Coffee and Tea and Allied products. The group has operations in India, USA, CIS countries, Europe, Africa and Vietnam.

Disclaimer: The article is for informational purposes only and not investment advice.

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