Sharekhan's research report on Tata Consumer Products
TCPL’s Q3FY25 operating performance was in line with estimates with revenue growing by 17% y-o-y (9% organic growth), while sharp tea inflation led to 234 bps y-o-y decline in OPM to 12.7%. Adjusted PAT fell by 11% due to higher interest cost. In the near term, margin pressure in the India Beverage business is likely to continue due to elevated input costs, while the India Foods business to see margin improvement led by price increases in salt and synergic benefits from the integration of recent acquisitions. Management expects to deliver mid-single-digit volume growth in the beverages business in the medium to long term. Capital Foods and Organic India businesses have now stabilised and shall accelerate from Q4FY25 with focus on food services and pharma channels.
Outlook
Stock trades at 78x/62x/51x its FY25E/FY26E/FY27E EPS, respectively. We maintain Buy with a revised PT of Rs. 1,234.a
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