Tata Coffee smells good
Tata Coffee is on the buzz today. The stock, which exactly a year ago, on 18th June’12, had hit a new 52-week low at Rs.865.60 is today at Rs.1129, with an intra day high at Rs.1131.70. Volumes stand at around 22,000 shares changing hands today.
The stock is on the buzz with corporate grapevine ripe with news that the company is scouting around for acquisitions and we could see some positive announcements in the days to come. It is looking for companies in Europe and the deal is expected to be struck before end of 2013.
The company is also changing its strategy by getting fully into high margin coffee and in that line, it plans to move out of spray-dried instant coffee, which is the low-end, commoditized category. By September, the company will be making only freeze-dried and agglomerated instant coffees, which have 40-50% higher margins than the low-end category.