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Informist, Wednesday, Apr. 2, 2025

By Alina Geogy

MUMBAI – Traders took bullish positions in the derivatives contracts of Tata Consumer Products after foreign brokerage Goldman Sachs upgraded its rating on the stock to 'buy' from 'neutral'. The brokerage shared a bullish outlook for the company, and also raised the stock's target price by 15%. This led traders to aggressively add long positions in the call options of the company, with premiums nearly tripling on several strikes.

Goldman Sachs raised its target price on the stock to INR 1,200 from INR 1,040. This new target price implies a further potential upside of 13% from Wednesday's close. The stock Wednesday closed at INR 1,062.70, up 7.1% from the previous close. It surged as much as 8.2% to a near-two-month high of INR 1,073.15 during the day.

The brokerage firm believes the worst is behind for Tata Consumer Products, even though competitive intensity remains a concern for the company, according to a CNBC-TV18 report. The brokerage expects the company's margins in its tea business to recover due to a hike in prices. Tata Consumer Products is undertaking strong innovation and is seeing distribution expansion in its growth businesses, Goldman Sachs said.

Traders added long positions in Tata Consumer's options contracts expiring Apr. 24. Both the highest open interest concentration and the maximum addition of open interest were at the INR 1,100-call and INR 1,000-put contracts. This call strike is 3.5% higher than Tata Consumer's spot price and the put option is 6% lower than the current level. Premium rose 590% on the INR 1,100-put option, and fell 70% on the INR 1,000 put option.

Meanwhile, traders covered their short positions in the April futures contract of the Nifty 50. This contract, which expires Apr. 24, closed at 23435 points, a premium of 102.65 points to the spot index. Open interest in the contract fell over 1% to 12.63 million, according to provisional data.

Among call options of the Nifty 50 expiring Thursday, the 23300-point strike had the highest change in open interest, with premium rising 35%. Among put options, the highest change in open interest was at the 23200-point strike, signifying a level 0.6% lower than the current level. Premium fell 33% on this strike. Market participants across the globe are waiting for clarity on the US administration's reciprocal tariffs, which are expected to be announced late Wednesday.

--Nifty 50 Apr closed at 23435.00, up 113.60 points

--Nifty 50 May closed at 23557.20, up 119.70 points; 224.85-point premium to spot index

--Nifty 50 Jun closed at 23656.15, up 108.25 points; 323.80-point premium to spot index

Bharat Electronics, HDFC Bank, BSE, Reliance Industries, IndusInd Bank, Infosys, ICICI Bank, Hindustan Aeronautics, Kalyan Jewellers India, Bajaj Finance, Zomato, Bharti Airtel, Tata Consumer Products, Trent, and State Bank of India were the most actively traded underlying stocks.  End

Edited by Ashish Shirke

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