Motilal Oswal has given Buy recommendation for Tata Consumer Products recommended buy rating on the stock with a target price of Rs 880 in its research re with a target price of Rs. 880 in its research report issued on Oct 21, 2022
Motilal Oswal’s research report on Tata Consumer Products
Tata Consumer Products (TATACONS)’s Standalone operating performance was strong led by EBIT margin expansion of ~190bp YoY (mainly due to gross margin expansion of ~210bp YoY) in 2QFY23. The strong Standalone performance offset the contraction in International business margins (EBIT margin contracted ~690bp) led by input cost inflation, currency weakness and lag in pricing. This resulted in muted Consolidated business performance, with EBIT margin contracting ~60bp YoY to 10.7% in 2QFY23. The company is on a portfolio expansion spree in its F&B segment, with product launches in new and innovative categories such as recent launch of Tata Sampann Hing and its foray into Protein-based product categories with the launch of a plant-based protein supplement Tata GoFit.
Outlook
Factoring in an in-line performance in 2QFY23, we maintain our FY23 and FY24 earnings estimates. We maintain our BUY rating on the stock with an SoTP-based TP of INR880.