Sharekhan Research has maintained buy rating on Tata Tea with target price of Rs 939.

According to the report, interested investors can buy the stock with a strict stop loss of Rs 745.

Shares of the company, on Monday (June 15), closed at Rs 76.10 on the Bombay Stock Exchange (BSE). The share price has seen a 52-week high of Rs 845.95 and a low of Rs 430 on BSE. Current EPS and P/E of the stock stood at 49.91 & 15.25 respectively.

Sharekhan's research report said, “We believe with a net cash of Rs 755 crore (and a gross cash of Rs 2,963 crore as on March 31, 2009), the company is in good position to build organic as well as inorganic growth in the coming years. We broadly maintain our estimates for FY2010 and introduce FY2011 estimates through this note. At the current market price, the stock is trading at attractive valuations of 11.8x its FY2010E earnings of Rs 64.5 and 10.2x its FY2011E earnings of Rs 75.0 compared to some of the large-cap FMCG stocks. We maintain our Buy recommendation on the stock with the revised price target of Rs 939 (as we roll over our price target at 12.5x its FY2011E earnings).”

Tata Tea, on June 15, said that it has developed a plan to compete internationally with Coca Cola, Pepsi and Unilever in the beverages business.

Launching a 5-15-year roadmap to make a worldwide leader in the branded beverages section, Tata Tea CEO Peter Unsworth stated Tata Tea may look at joint ventures and acquirements for this reason.

Tata Tea, in March 2009, announced that the company, through one of its abroad divisions, along with EBRD (European Bank for Reconstruction and Development) has decided to get hold of 51% of the Grand, a renowned player in Russia`s coffee and tea sector, with the company and EBRD having an effective share of 33.2% and 17.8% respectively.