Tetly tea maker Tata Consumer Products shares sank over two percent in the morning session on April 24, after the consumer staples firm reported its earnings show for the fourth fiscal quarter of FY2025. However, brokerages were optimistic on the firm's margin recovery amid normalising input cost inflation.
Tata Consumer Products' net profit for the quarter was Rs 345 crore, which was aided by a one-time exceptional gain of Rs 45 crore. During the same period last year, the firm reported a net profit of Rs 432 crore, which was reported as Rs 216 crore, as a result of an exceptional loss to the tune of Rs 215.8 crore. Consolidated revenue for the March quarter rose 17 percent to Rs 4,608 crore.
At 10.40 am, shares of Tata Consumer were quoting Rs 1,127.4, down two percent on the NSE.
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Tata Consumer Products' operating profit growth continues to be impacted by sharp tea inflation in the India business, but margins were slightly better than expectations, according to brokerages.
YES Securities downgraded its rating on the counter, to 'add' from 'buy', stating, "Even in a difficult environment, company continues to execute on its strategic priorities: strengthening GT, driving new channels, innovations, etc. We remain fundamentally positive but downgraded due to limited upside on 1-year forward basis." However, the brokering house increased its target price on shares to Rs 1,280, from Rs 1,200 earlier.
Nuvama Institutional Equities also bumped up its target on the firm to Rs 1,335,which was earlier Rs 1,255 per share.
The firm's salt revenues grew 13 percent with mid-single digit volume growth. It also gained 30 bps
market share. "TCPL is able to hike realizations (> inflation) as well as is able to gain market shares in India Salt. We consider it as commendable performance," said ICICI Securities, maintaining its 'add' rating, along with a target price of Rs 1,220 per share.
The brokerage expects Tata Consumer Products to report revenue and PAT CAGR of 12.2 percent and 23.3 percent, respectively over FY25–27E led by recovery in margins of India Beverages with expected correction in tea prices. There will be synergies in distribution expansion too.
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