Sharekhan's research report on Tata Consumer Products
TCPL will become strong play with integration of Tata Chemicals’ consumer business; share of consistently-performing India business in revenue to rise to 61% from 48%, margins too can rise 60-80 bps in the near term. Appointment of consumer expert Mr. Sunil D’Souza as MD & CEO improves earnings visibility; consolidated revenue and earnings (including TCL’s consumer business) to clock CAGR of 10% and 20% over FY2020-23E. Balance sheet strengthening despite commodity-linked business; FCF rose to Rs. 711 crore in FY2020 from negative Rs. 103 crore in FY2019; debt/equity ratio at 0.1x.
Outlook
Initiating coverage on Tata Consumer Products Limited (TCPL) earlier named Tata Global Beverages with a Buy rating and PT of Rs. 484.
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