Morgan Stanley today downgrade Tata Global Beverages to 'underweight' from 'equal weight' with a target price of Rs.140 per share.
Shares in the company fell 2.9 per cent after news of the downgrade.
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 joint venture 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 Monday.
"Structurally this is one of the weakest businesses in our coverage universe," the note adds.
The stock has benefited from improved investor sentiment and the business suffers from poor earnings visibility, according to Morgan Stanley.