Tata Global Beverages saw its share price gain almost 7 percent on Wednesday on the Bombay Stock Exchange (BSE), a day after the company's board of directors announced its decision to remove Cyrus Mistry as chairman. The stock rose to the day's high of Rs 125.25, up 6.83 percent, but later shed gains to trade at Rs 122 at around 12.58 pm.
"After extensive deliberations, and keeping in view the long-term interest and alignment of all stakeholders and stability of the Company, the Board of Directors resolved to replace Mr Cyrus P Mistry as Chairman of the Company, by majority vote, with 7 out of the 10 Directors present at the Board Meeting, voting in favour of the resolution," Tata Global Beverages said in its regulatory filing on Tuesday.
Mistry has been replaced by Harish Bhat, a non-executive director of the company. As is already known, Mistry was ousted as chairman of Tata Sons on October 24, triggering a spell of allegations and counter-allegations from both him and the Tata Group.
For the second quarter (Q2) ended-September 2016, Tata Global Beverages reported 68.6 percent rise in consolidated net profit to Rs 140 crore as against Rs 83 crore in the year-ago period. However, income from operations dropped 2.5 percent to Rs 1,626 crore.
"While the underlying business saw volume growth, this was offset by price reductions and adverse impact of currency translation," the company said in another statement.
The rise in net profit was attributed to "lower commodity costs and lower spends on new initiatives" and "better performance by joint ventures and associate companies."
The company's associate firms, subsidiaries, alliances and joint ventures include NourishCo Beverages Ltd., Tata Starbucks Ltd., Tetley Harris, Tata Coffee Ltd., Zhejiang Tata Tea Extraction Company Ltd., Tata Tea Extractions Inc., Amalgamated Plantations Pvt. Ltd., Kanan Devan Hills Plantations Co. Pvt. Ltd. and Estate Management Services Pvt. Ltd.
The BSE Sensex was trading at 26,472, a gain of 167 points, at around 1.20 pm. Top gainers were Asian Paints, TCS, Bajaj Auto, Hero Motocorp and Mahindra.