Buy Tata Consumer Products: target of Rs 685 : Sharekhan
Sharekhan is bullish on Tata Consumer Products has recommended buy rating on the stock with a target price of Rs 685 in its research report dated January 18, 2021.
January 21, 2021 / 04:44 PM IST
Sharekhan's research report on Tata Consumer Products
Improving business fundamentals post acquisition of Tata Chemicals Ltd’s (TCL’s) consumer business strong earning visibility makes TCPL better pick in the consumer staples space. Improving out-of-home consumption (Tata Starbucks, NourishCo set to gain), sustained demand for branded products and higher e-Commerce sales to drive domestic business in near to medium term. Risk of commodity prices is receding as domestic tea prices dropped 35% from highs in July-August 2020 while Kenyan tea prices remain benign. Synergistic benefits from merger of TCL will help OPM to reach close to 16% by FY23. Q3FY21 is expected to be yet another quarter of strong performance with revenues and PAT (including merged entity of TCL’s consumer business) is expected to grow by 43% and 89% respectively on y-o-y basis.
We retain a Buy on Tata Consumer Products Ltd (TCPL) with a revised price target of Rs. 685.
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