Buy Tata Consumer Products; target of Rs 1320: Motilal Oswal

Motilal Oswal is bullish on Tata Consumer Products has recommended buy rating on the stock with a target price of Rs 1320 in its research report dated October 20, 2024.

Broker Research

October 21, 2024 / 21:03 IST

Buy

26 Aug, 2025 12:21

Volume

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Motilal Oswal's research report on Tata Consumer Products

Tata Consumer Products (TATACONS) reported 8% YoY EBIT growth in2QFY25 on the back of a strong performance in its international brandedbeverage segment (EBIT up 74% YoY) and non-branded business (EBIT up86% YoY). EBIT for India branded business declined 26% YoY due to tea costinflation. Organically (excluding acquisition), India business revenue grew 2% YoY andEBITDA declined 23% YoY in 2QFY25.Going ahead, India business margins are likely to recover as the companyhas increased prices of salt (to mitigate cost inflation) and tea (staggeredprice increases). The growth business will continue to drive revenue, with arebound in the ready-to-drink (RTD) segment.Factoring in 2Q performance, lower interest cost led by repayment of debtand tax benefits from the merger with subsidiaries, we increase our FY25earnings estimates by 6% while maintaining our FY26 earnings estimates.Reiterate BUY with an SoTP-based TP of INR1,320.

Outlook

We expect TATACONS to clock a CAGR of 10%/13%/19% in revenue/EBITDA/PAT during FY24-26. Reiterate BUY with an SoTP-based TP of INR1,320.

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