Tata Consumer Products Ltd. share price target

Tata Global Beverages reported good set of results in 1QFY17. Consolidated revenue grew by ~4%/-11% to Rs.17.1bn/Rs.19.2 bn YoY/QoQ. The company’s EBITDA margin expanded by 283/531 bps to ~31%/44% YoY/QoQ. Adjusted PAT was Rs.1178 mn in 1QFY17 vs Rs.814 mn in 1QFY16 led by strong growth in operating profit.BOB Capital Markets Ltd value the stock at an average PE of 23x FY18e EPS with target price Rs.175 (28% upside).

Tata Global Beverages (TGBL) reported muted Q1FY17 sales whereas it performed ahead of our expectations on operational & earnings front. Sales grew 3.8% YoY to | 1711.5 crore (I-direct estimate: | 2125.2 crore) on the back of YoY growth of 20.8% & 17.1% in coffee segment & non branded business respectively. However, tea segment declined by 1.3%. TGBL reported Q1FY17 results as per Ind AS, which led to promotional expenses being netted off from sales, thus resulting in lower topline in absolute terms . EBITDA margins improved 283 bps to 13.8% (I-direct estimate: 8.8%) driven by lower advertising spend (down 247 bps as percentage of sales) & benign commodity cost (down 103 bps as percentage of sales). PAT increased by 51.9% YoY to | 119.5 crore (I-direct estimate: | 89.5 crore) led by higher EBITDA. ICICI Securities Limited value the stock on an SOTP basis arriving at a target price of | 147 & maintain HOLD rating.

ICICI Securities Ltd | Retail Equity Research Tata Global Beverages (TGBL) reported tepid net sales growth of 2.8% YoY to | 1928 crore (I-direct estimate: | 1949.9 crore) mainly...

Branded Revenue from EMEA (Europe, Middle East and Latin America) and CAA (Canada, America and Australia), which contribute around 25% each to total revenue, have reported weak growth in the current quarter and in the first three quarters of FY16. In 9MFY16, revenue from EMEA and CAA markets decreased by 6.2% and 2.4% respectively. Over the last few years, the weak growth from these businesses is putting pressure on consolidated topline and bottomline of the company.

Valuation: At CMP Rs.109, the stock is trading at around 18x FY15 PE. We expect that Company's revenue/ EBITD A to grow at ~6%/10% CAGR respectively o ver FY15-FY18e. We value the stock at a verage PE of 21x with...

Green and Specialty Tea to drive the growth: With well placed green teaand specialty tea brands in portfolio, which are expected to witness global annual growth rate of 10% and 4% in the next five years along with premiumization trend and higher realizations are expected to drive the growth. Price realizations are higher as compared to black tea and profitability expected to increase as this segment share increases.

We initiate coverage on Tata Global Beverages Ltd with a BUY rating and a price target of Rs.183 implying 39% upside. We expect TGBL to drive its revenue/ earnings CAGR at 6%/30% respectively over FY15FY18e. We expect TGBL to grow faster on the back of changing product...

Tata Global Beverages ltd. (TGBL) is the leading branded tea player across the globe and the market leader in domestic tea market. Over the years, it has increased its brand popularity by its...