Accumulate Tata Consumer Products; target of Rs 1260: Deven Choksey

Deven Choksey's research report on Tata Consumer Products

Tata Consumer Products reported a robust performance in Q2FY26, with results coming in above our estimates across most parameters, aided by a sharp recovery in margins and sustained growth momentum in the India business. Revenue: Consolidated revenue grew 17.8% YoY (+3.9% QoQ) to INR 49,659 Mn, ahead of our estimate (+4.6%), driven by broad-based growth across categories. The India business reported 18% YoY growth with 14% volume expansion, marking the second consecutive quarter of double-digit volume growth. Beverages grew 12% YoY, led by normalization in tea pricing and strong coffee performance (+56% YoY). The Foods portfolio delivered 19% YoY growth, aided by robust demand in value-added salt (+23%) and Tata Sampann staples (+40%).

Outlook

We have roll-forwarded our valuation basis to Sept’27 estimates. We value Tata Consumer Products at 54.0x Sept’27 EPS, implying a target price of INR 1,260. We reiterate our “ACCUMULATE” rating on the stock, supported by improving profitability in the India business, sustained growth in Foods and Beverages, and continued traction in premium categories and new product launches.