Tata Consumer Products Ltd. share price target

*over or under performance to benchmark index Tata Consumer Products, a leading Tata Group company, has a global presence in food and beverages. It is the world's second-largest tea company, with significant...

Consolidated revenue grew by 9.8% YoY (+3.7% QoQ) to INR 47,789 Mn., below our estimates (-3.4%), led by weakness in Capital Foods, Organic India, and NourishCo’s, which were impacted by transitory disruptions, partly offset by a resilient performance in the India Business, which grew 11.0% YoY (+6.4% QoQ).

Tata Consumer Products (TATACONS) reported 10% revenue growth in 1QFY26, while EBIT declined 12% YoY. EBIT was affected by higher input costs in the Branded business (India/international business EBIT down 11%/12% YoY) and declining coffee prices in the non-branded business (EBIT down 33%).

Tata Consumer Products’ (TATACONS) FY25 annual report highlights the management’s strategic efforts to reinforce its foundation by broadening distribution reach and market presence, driving growth through portfolio expansion, pursuing new opportunities, and prioritizing innovation.

Tea market share losses to unorganised / regional players are limiting inflation pass-through. Margin recovery now reliant on deflation

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.

TCPL’s Q4FY25 numbers were good with consolidated revenue growing by 17.3% y-o-y to Rs. 4,608 crore (12% y-o-y organic revenue growth), with India beverage business revenues growing by 17% y-o-y (9% y-o-y organic growth), India foods business improving 27% y-o-y (organic growth at 17%), international business growing by 5% y-o-y and non-branded business reporting a 25% y-o-y growth.

TCPL’s Q3FY25 numbers are not exactly comparable on y-o-y basis due to consolidation of acquired businesses - Capital Foods and Organic India. TCPL’s Q3FY25 performance was impacted by sharp increase in the tea prices (up by 20-40%) which led to 234 bps y-o-y decline in the consolidated OPM to 12.7%.

Tea inflation recovery prospects have improved as higher pricing has come through earlier than expected

Richly valued, even conside ring an optimistic outlook

Tata Consumer share price corrected ~7% post 2QFY25 result on Tea inflation and sales challenges in NourishCo. Correction is overdone

Tata Consumer Products (TATACONS) reported 8% YoY EBIT growth in 2QFY25 on the back of a strong performance in its international branded beverage segment (EBIT up 74% YoY) and non-branded business (EBIT up 86% YoY).

Compared to consensus, sales came in 3% lower while EBITDA was in line

Tata Consumer Product Ltd’s (TCPL’s) Q2FY2025 performance was broadly in line with expectations with revenues growing by ~13% y-o-y (organic growth at 5%) and OPM rising ~50 bps y-o-y to 14.9%.

Medium- to long-term growth prospects remain intact with TCPL targeting double-digit topline growth driven by growth businesses

Our analysis of Tata Starbucks financials over FY14-24 indicate It had revenue CAGR of 29% over FY14-24 and store count CAGR of 26%. The revenue/store has remained flat at ~INR 35mn.

TATACONS reported sales and EBITDA beat on improved margins in the unbranded business and MA

Tata Consumer Products (TATACONS) reported a healthy operating performance in 1QFY25. EBIT growth of 12% YoY was led by a strong performance in international branded beverage segment.

Tata Consumer Products Ltd’ (TCPL’s) operating performance was good with revenues and operating profit growing by 16% and 22% y-o-y respectively; higher interest cost kept adjusted PAT flat at Rs. 368 crore.