Why has the Tata Consumer Products share price imploded?

Tata Consumer Products share price has suffered a harsh reversal as it moved into a deep bear market. After soaring to ₹1,248 in July this year, the stock has dived to ₹922, its lowest level since December last year. 

The sell-off coincided with the sharp reversal of other Tata Group of Companies companies. Tata Steel stock has dived to ₹137.9, its lowest level since March 2024. Similarly, Tata Consultancy Services has moved into a correction, falling by 10% from its highest level this year.

Other companies, such as Titan, Tata Power, and Tata Chemicals, have all fallen by over 10% from their highest levels this year.

Tata Consumer Products share price has crashed

TCP is one of the biggest fast-moving consumer goods (FMCG) companies in India. It focuses on key consumer products like tea, coffee, liquid beverages, and foods.

The company has a leading market share in all these industries. For example, it has continued to take share in tea as one in three households in India start their mornings with a cup of Tata Tea, which is the second-biggest tea brand in the country. Tetley has become the third-biggest tea brand in the UK and the biggest one in Canada.

It also owns some of the top brands in the coffee industry like Eight O’Clock, Tata Coffee Gold, and Tata Coffee Cold Coffee. Other top brands in its portfolio are products like Tata Salt, Tata Starbucks, and Tata Copper+.  Eight O’Clock is the 4th biggest coffee brand in the US.

Tata Consumer Products has historically done well as the middle-class expansion continued in the past few years. As a result, its annual revenue has continued growing, helped by higher volumes and prices. 

The stock has underperformed the market even after it published strong financial results. Its consolidated revenue growth was 13%, with India Beverages growing by 3%. India Foods and its international business had a 28% and 7% growth rate. 

The numbers showed that India’s beverages segment generated ₹1,380 crore in revenue, while Indian Foods, International, and non-branded jumped by 28%, 7%, and 19%.

For the H1’FY25, its India beverages revenue was ₹2,903 Cr, while the other three grew by 29%, 9%, and 26%, respectively. These numbers showed that the company was doing well as demand for packaged goods rose. 

However, there are concerns about growth and costs in India and other markets. These concerns have helped to push most FMCG companies sharply lower. For example, Unilever’s shares have dropped by 12% from the year-to-date high. Hindustan Unilever shares have moved into a bear market after falling by 20% from the year-to-date high.

In the long term, however, the Tata Consumer Products share price may bounce back because it is often seen as one of the country’s top-value brands.

Tata Consumer Products share price analysis

Tata Consumer Products chart by TradingView

The daily chart shows that Tata Consumer Products stock price has dived amid weak technicals. It formed a double-top pattern at ₹1,247. In most periods, this is one of the most bearish patterns in the market. 

The stock has also dived below the neckline at ₹1,016, its lowest swing on June 4. It has also formed a death cross pattern as the 200-day and 50-day moving averages have made a bearish crossover. In most periods, this is one of the most bearish signs in the market.

Tata Consumer Products has also dropped below the bottom of the trading range of the Murrey Math Lines tool. The Relative Strength Index (RSI) and the Stochastic Oscillator have continued falling.

Therefore, the stock will likely continue falling as sellers target the key support level at ₹800. On the flip side, a move above the key resistance level at ₹1,016 will point to more gains in the near term.

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