Accumulate Tata Consumer Products; target of Rs 1310: KR Choksey

KR Choksey recommended accumulate rating on Tata Consumer Products with a target price of Rs 1310 in its research report dated August 12, 2024.

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August 16, 2024 / 14:41 IST

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KR Choksey's research report on Tata Consumer Products

Q1FY25 consolidated revenue stood at INR 43,521 Mn, which grew by 16.3% YoY/ +10.8% QoQ, (in line with estimates). EBITDA grew to INR 6,674 Mn, up 22.4% YoY/ (+6.0% QoQ), missing our estimates by 2.1%. EBITDA margin stood at 15.3% (+77 bps YoY/ -70 bps QoQ) was lower than our estimates, due to higher-than-expected operating expenses such as other expenses. Adj. PAT was at INR 3,074 Mn, down 4.5% YoY(-28.9% QoQ), which was below our expectations. This was primarily due to higher-thananticipated interest expenses and tax rates. We continue to value the stock on a SOTP basis, maintaining EV/EBITDA multiples for most businesses while increasing for Indian Business due to new product launches and an improved product mix.

Outlook

We maintain our target price to INR 1,310 per share, an upside of 10.5% over the CMP. Based on the price appreciation of 7.2% since our last quarterly update, we downgrade our rating to an “ACCUMULATE” from “BUY” on the shares of Tata Consumer Products Ltd.

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