November 19, 2012 / 5:02 AM / 5 years ago

MARKET EYE-Starbucks' impact on Tata Global overstated-M Stanley

* Shares in India's Tata Global Beverages fall 2.9
percent after Morgan Stanley downgrades the stock to
"underweight" from "equal weight".
* Tata Global shares have nearly doubled this year, partly on
hopes about its outlook as the joint venture partner of
Starbucks, which has opened three coffee shops in India
this year.  
* However, Morgan Stanley says the contribution from the
Starbucks JV will be limited and recommends booking profits on
Tata Global.
* "The business suffers from poor earnings visibility, weak
brand/market positioning, a lack of pricing power, sluggish
revenue growth and mediocre return ratios," Morgan Stanley says
about Tata Global in a note dated on Monday.
* Morgan Stanley also adds: "Structurally this is one of the
weakest businesses in our coverage universe."

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