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FutureBull
Senior Member
Joined: 06/Feb/2009
Location: India
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Posts: 1868
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   Posted: 13/Jun/2013 at 10:55pm |
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Sure, this is no longer a pure commodity play. These guys have built durable brands over the last 5 yrs and time to reap dividends is now. Recession or no recession folks would drink coffee. If not at Starbucks somewhere else. Tata Coffee is Asia's largest instant coffee maker.
ROCE has increased to 26% in FY13. Div. payout ratio is also going up now for FY13 it is 37% which is not bad considering that capex needed is not that high going forward.
I got interested only when I saw Shankar Sharma talking highly about it. He said this could be $5 bn company in times to come. I have still not found reason to be so bullish. I would post if I find anything game changer. This is a good FMCG play no doubt about that.
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‘The market always does what it’s supposed to — BUT NEVER WHEN’.
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rajivsubra
Senior Member
Joined: 04/Sep/2009
Location: India
Online Status: Offline
Posts: 130
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Posted: 14/Jun/2013 at 4:04pm |
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Futurebull, when a good FMCG play drops 30% relative to the market, I think its time to buy. It reminded me of:
"In 1964, the “salad oil scandal,” where a vegetable oil company obtained massive loans through falsified collateral rocked American Express, which had provided warehouses and vouched for the company’s inventory. This event ended up costing the company approximately $58 million and much of its reputation. In the period after the scandal broke, investors couldn’t sell AXP shares fast enough, and the stock lost 50% of its value in a short time, falling to $35 per share. Buffett, however, saw this moment of panic for just what it was – a drawback for an otherwise very stable company with long-term growth potential. Buffett observed people beginning to use credit cards in their daily transactions, and recognized AXP’s potential to become an American blue chip. The Berkshire Hathaway CEO purchased shares with a cost basis of $1.28 billion. As of December 31, 2009, the company’s 151.6 billion shares are worth more than $5 billion, an unrealized gain of $3.7 billion and an increase of 290%. Berkshire Hathaway currently owns 12.7% of American Express."
http://247wallst.com/2011/01/21/warren-buffetts-greatest-investments-of-all-time/#ixzz2WBRbQ6wZ
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tejas.k
Senior Member
Joined: 07/Dec/2009
Location: India
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Posts: 563
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Posted: 14/Jun/2013 at 4:23pm |
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i think the listed company tata coffe doesn't have any consumer facing products. their website doesn't mention any. i think all the products, including starbucks come under tataglobalbeverages
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FutureBull
Senior Member
Joined: 06/Feb/2009
Location: India
Online Status: Offline
Posts: 1868
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Posted: 14/Jun/2013 at 8:50pm |
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Inccorrect! They do have brands.
see this link below. I agree the website is very clumsy and old style. They have International Tata Café, Mysore Gold and Malabar are the popular Instant Coffee brands which are exported. Check link for domestic brands.
http://www.tatacoffee.com/products/conventional_coffee/domestic_brands.htm
Apart from that iconic Eight O'clock coffee in US and through a JV they have introduced vitamin beverages in US.
The Starbucks venture is split into two. The front end is 50:50 venture between Tata Global and Starbucks while Tata Coffee would supply high premium coffee products for their Indian/international venture.
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‘The market always does what it’s supposed to — BUT NEVER WHEN’.
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FutureBull
Senior Member
Joined: 06/Feb/2009
Location: India
Online Status: Offline
Posts: 1868
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Posted: 14/Jun/2013 at 9:00pm |
I agree sometimes one needs to follow his/her guts to take the plunge. I am still not over with my emotional connect with stocks. Anyway, I am not over with my conviction building exercise so no regrets.
I learnt that they have plantation trails where you could book coffee resorts in the middle of huge green plantations. Let me know if any of you have visited. I am pushing one of my friend to make a visit to Coorg  . Let's see.
Originally posted by rajivsubra
Futurebull, when a good FMCG play drops 30% relative to the market, I think its time to buy. It reminded me of:
"In 1964, the “salad oil scandal,” where a vegetable oil company obtained massive loans through falsified collateral rocked American Express, which had provided warehouses and vouched for the company’s inventory. This event ended up costing the company approximately $58 million and much of its reputation. In the period after the scandal broke, investors couldn’t sell AXP shares fast enough, and the stock lost 50% of its value in a short time, falling to $35 per share. Buffett, however, saw this moment of panic for just what it was – a drawback for an otherwise very stable company with long-term growth potential. Buffett observed people beginning to use credit cards in their daily transactions, and recognized AXP’s potential to become an American blue chip. The Berkshire Hathaway CEO purchased shares with a cost basis of $1.28 billion. As of December 31, 2009, the company’s 151.6 billion shares are worth more than $5 billion, an unrealized gain of $3.7 billion and an increase of 290%. Berkshire Hathaway currently owns 12.7% of American Express."
http://247wallst.com/2011/01/21/warren-buffetts-greatest-investments-of-all-time/#ixzz2WBRbQ6wZ |
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‘The market always does what it’s supposed to — BUT NEVER WHEN’.
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rajivsubra
Senior Member
Joined: 04/Sep/2009
Location: India
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Posts: 130
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Posted: 15/Jun/2013 at 12:53pm |
They own the 8o'clock brand http://www.tatacoffee.com/subsidiary/subsidiary_eight.htm
But they dont seem to make enough noise about it, and the FMCG portion of their story is hardly present in their investor communication.
Originally posted by tejas.k
i think the listed company tata coffe doesn't have any consumer facing products. their website doesn't mention any. i think all the products, including starbucks come under tataglobalbeverages |
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jagbir
Senior Member
Joined: 17/Apr/2010
Location: India
Online Status: Offline
Posts: 331
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Posted: 15/Jun/2013 at 2:03pm |
Originally posted by FutureBull
I learnt that they have plantation trails where you could book coffee resorts in the middle of huge green plantations. Let me know if any of you have visited. I am pushing one of my friend to make a visit to Coorg . Let's see.
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I visited one of their resorts: cottabetta, coorg and experience was amazing!! highly recommend to visit for 1 or 2 days. 
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I find that the harder I work, the more luck I seem to have.
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grim
Groupie
Joined: 30/Nov/2007
Online Status: Offline
Posts: 41
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Posted: 24/Jun/2013 at 11:23am |
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Tempting price.
Tata Coffee@ 140, does it make it cheap enough to risk a bite, does the business have some mid term upside potential?
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