Motilal Oswal's research report on Tata Consumer Products
Tata Consumer Products (TATACONS) reported 17% revenue growth in 4QFY25, while EBIT declined 9% YoY. EBIT was affected by higher input costs (tea cost inflation) in Indian branded business, which declined 25% YoY, and a 4% EBIT drop in international branded beverage segment. However, these factors were partially offset by 22% YoY EBIT growth in non-branded business. Consolidated EBIT grew 13% QoQ, led by price hikes in the tea and salt portfolio. Going forward, Indian business margins are likely to recover as the company has increased prices of salt and tea (staggered price hikes to mitigate cost inflation) and as there are early signs of good tea crop in Mar/Apr’25.
Outlook
We largely maintain our FY26/FY27 EBITDA estimates and reiterate BUY with an SoTP-based TP of INR1,360.
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