Sharekhan's research report on Tata Consumer Products
Tata Consumer Products Limited (TCPL) is set to acquire Capital Foods and Organic India, which fit well within key growth platforms, including premiumization and value accretion in the portfolio. There is significant potential to leverage TCPL’s strong distribution network, global presence and increasing scale with scope for operating efficiencies to drive profitability. Acquisitions would be done at combined enterprise value (EV) of Rs. 7,000 crore; and funded through a mix of internal accruals/debt/equity. It will be earnings accretive in FY26E (in mid-single digits based on calculations).
Outlook
Stock trades at 58x/52x its FY2025E/26E EPS. Acquisitions will add strong value to portfolio and earnings in the medium to long run. We maintain a Buy with a revised PT of Rs. 1,315.
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