Buyl Tata Consumer Products; target of Rs 1300: Motilal Oswal

Motilal Oswal's research report on Tata Consumer Products

In FY25, India’s tea production declined 5% YoY but rebounded in the current season (Jan– Jul’25) with 14% growth, led by Assam and West Bengal. This stabilized prices after a peak in Jun’25. The Indian tea business remained resilient, with pricing actions partly offsetting cost pressures; margins contracted in 1QFY26 but are expected to improve from 2Q as production improves and prices stabilize. Alongside, the company is expanding its health & wellness portfolio, premiumizing its tea product portfolio in the domestic market, and maintaining ecommerce leadership. In this note, we have analyzed tea prices and production trends and their impact on Tata Consumer Products (TATACONS).

Outlook

We expect TATACONS to clock a revenue/EBITDA/PAT CAGR of 10%/12%/13% during FY25-27. We reiterate our BUY rating with an SoTP-based TP of INR1,300.