Shares of these two Tata Group firms zoomed up to 60% in last one week

The share price of Tata Investment Corporation has zoomed 60%, while TRF has appreciated by 58 per cent in past one week on the BSE.

Shares of two Tata Group companies - Tata Investment Corporation and TRF continued at their northbound movement, hitting multi-years high on the BSE in Thursday’s intra-day trade. These two stocks have now rallied up to 60 per cent in past one week. 

Tata Investment Corporation hit a fresh record high of Rs 2,849.95, and has surged 9 per cent so far today. In the past one week, the stock has zoomed 60 per cent from a level of Rs 1,786, as compared to 2 per cent rise in the S&P BSE Sensex.

Tata Investment Corporation is a non-banking financial company (NBFC) promoted by Tata Sons. The company is registered with the Reserve Bank of India under the category of Investment Company. It is engaged in the business of investment in listed and unlisted equity shares debt instruments of companies in a wide range of Industries and in mutual funds.

The major sources of income for the company consists of dividend income and profit on sale of investments. The company together with Tata Sons is a promoter of the Tata Mutual Fund. The company is also the principal shareholder of Tata Securities Ltd a company engaged in the distribution of mutual funds and other investment-related securities.

Tata Investment recorded an appreciation of 38 per cent in its NAV in FY22 and realized gains of Rs 430.61 crore on equity investments (post-tax) taking advantage of the buoyant markets. Going forward the performance will be dependent on how global factors, the economy and corporate earnings shape up over the second half of the year, the company said.

Tata Investment said the company aims to remain invested in leaders in sectors, which they believe have potential to remain value accretive over the medium and long term. The company further said it continues to invest for the long term while availing opportunities to realize gains to augment the operating income for dividend distribution.

The company invests in Tata and Non-Tata companies, both listed and unlisted, though investments in Tata companies constitute a larger portion and may be considered for a longer term and are strategic in nature. The company endeavours to evaluate opportunities and invest considering the macro economic conditions both globally and domestically, Tata Investment said in its FY22 annual report.

“The company will continue to look for opportunities to invest in companies which have consistent growth prospects with high quality earnings. In new age companies where valuations are a concern and whose earnings will fructify at a later stage in their development, the Company has made a small allocation of capital,” the company said.

Meanwhile, shares of TRF were locked in upper circuit for the third straight day, up 10 per cent at Rs 267.35 on the BSE. In the past three days, the stock of industrial equipments has surged 58 per cent from Rs 168.80 on September 12, 2022. It now trades at its highest level since April 2018. The exchanges changed circuit limit of the stock to 10 per cent from 20 per cent with effect from today. Tata Steel (TSL), the promoter of the company, held 34.11 per cent stake in the company as on June 30, 2022.

TRF undertakes turnkey projects of material handling for the infrastructure sector such as power and ports and industrial sector such as steel plants, cement, fertilisers and mining. The Company is also engaged in production of such material handling equipments at its manufacturing facility at Jamshedpur. Further the Company is engaged in provding services relating to design and engineering, supervision, etc.

On outlook, TRF said significant  improvements & growth is expected in core sectors (steel, mining and power etc), which will have a cascading effect on all associated sectors like material handling OEMs and demand for project management/construction services.

In August 2022, CARE Ratings revised the long-term rating of TRF from ‘Negative’ to ‘Stable’ is on account of reduction in outside liability through the support of funds received from the parent TSL. Furthermore, the company has recorded continuous decline in cash losses over the past two years and CARE envisages that the company is likely to turn marginally cash positive in FY23, largely on the back of order-book execution for TSL, the rating agency said in rationale.