Tata Consumer Q4 review: Brokerages bullish despite 19% profit fall, shares tank 5%

Over the past six months, Tata Consumer shares gained more than 30 percent.

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26 Aug, 2025 12:21

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Tata Consumer shares slipped over five percent in trade on April 24, a day after the FMCG player's earnings show.

Brokerages stayed bullish on Tata Consumer, despite the FMCG player's net profit falling under the Street's estimates, as EBITDA margins surpassed expectations.

The owner of Tetley Tea and Ching's Secret noodles brands reported a net profit of Rs 217 crore for the fiscal fourth quarter, a fall of 19 percent from Rs 269 crore a year ago. Revenue increased 8.5 percent on-year to Rs 3,927 crore in the three months ended March 31.

Brokerage house CLSA noted that higher depreciation and amortisation charges led to a miss of 6 percent on the pre-exceptional PAT, while Morgan Stanley said that the organic topline growth was lower than its estimates.

The lower topline was a result of weaker growth in the India Beverages segment, as per Morgan Stanley. For the quarter, India Beverages grew 3 percent on-year and tea volumes remained flat.

Also Read | Tata Consumer Q4 net profit falls 19% to Rs 217 crore

The tea business saw a margin share loss, while the market share of salt segment improved around 50 basis points. During February and March, the salt business reached its highest-ever market share of around 39.9 percent.

Tata Consumer delivered an EBITDA margin of 16 percent, which was 90 basis points higher when compared to a Moneycontrol poll, which foresaw the EBITDA margin at 15.1 percent. The EBIDTA margin was the highest in 14 quarters.

Morgan Stanley said the margin growth was aided by the Tata Group firm's strong expansion in the non-branded segments and its international business.

The international brokerage reiterated its 'overweight' call on the firm, with a target price of Rs 1,305 per share. From the previous session's closing price, this indicates an upside of 11 percent.

"Tata Consumer continues to drive growth via innovation, distribution expansion and foray into new segments," Nuvama Institutional Equities said. The brokerage retained its 'buy' call, with a target price of Rs 1,400 per share, implying a 19 percent upside.

CLSA, however, maintained its 'underperform' call, with a target price of Rs 1,288 apiece. This is 9.8 percent higher than the previous session's close.

Over the past six months, shares of the Tata Group company have gained more than 30 percent. In comparison, the Nifty 50 index has gained around 15 percent.

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.