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Informist, Monday, Jun. 30, 2025

By Anjana Therese Antony

MUMBAI – The options chain of Tata Consumer Products saw more bearish bets amid near-term headwinds in the fast-moving consumer goods sector. Some of the challenges include persistent weakness in urban demand, only gradual recovery in rural demand, and persistent pressure on margins. Deep out-of-the-money call options saw a sharp decline in premiums, while those on put options surged. 

Nomura Global Markets Research said in a research report that gross margins and operating margins of FMCG companies will "remain weak in the June quarter as companies will still be consuming high price raw material inventory". The recent moderation seen in raw material prices is likely to start benefiting the companies only from the September quarter onwards. "Continued margin pressure has kept companies away from increasing competitive intensity," it added. 

The Tata Consumer stock closed 2.3% lower at INR 1,098.90 Monday as the worst-hit constituent of the Nifty 50. Its market capitalisation declined over 2% to INR 1.09 trillion. It extended losses for the second consecutive session, falling 4% over these two days. The near-term support for the stock is seen at INR 1,020-INR 1,000 and resistance at INR 1,140-INR 1,180.

In the options chain of Tata Consumer, premiums on INR 1,140-INR 1,250 call contracts expiring Jul. 31 declined 41-53% and those on INR 1,090-INR 1,000 put strikes declined around 86%. The highest addition of open interest was at INR 1,100 call as well as put options. The maximum concentration of open interest was at INR 1,130 call and INR 990 put contracts. 

Nomura expects the step-up in Tata Consumer's advertising expenditure to put pressure on its near-term margins and lead to an almost 8% decline in its earnings before interest, tax, depreciation, and amortisation. The broking firm also believes softening coffee prices will hit the company's plantation and extraction margins. However, the company's core business is expected to continue to report double-digit growth, it said.

--Nifty 50 Jul closed at 25615.00, down 135.20 points; 97.95-point premium to the spot index

--Nifty 50 Aug closed at 25734.00, down 125.10 points; 216.95-point premium to the spot index

--Nifty 50 Sept closed at 25885.00, down 123.00 points; 367.95-point premium to the spot index

State Bank of India, Reliance Industries, InterGlobe Aviation, Dixon Technologies (India), HDFC Bank, Bharat Electronics, ICICI Bank, Infosys, RBL Bank, Jio Financial Services, Trent, Axis Bank, Torrent Pharmaceuticals, Central Depository Services (India), Federal Bank, Hero MotoCorp, BSE, Punjab National Bank, and Kotak Mahindra Bank were the most active underlying stocks Monday.  End

Edited by Rajeev Pai

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