Motilal Oswal has given Buy on the stock with a revised price tar recommendation for Tata Consumer Products with a target price of Rs. lal Oswal is bullish on Tata Consumer Products has recommended buy on the stock with a revised price target (PT) of Rs. 910 in its research report issued on Feb 03, 2022
Tata Consumer Products (TCP) reported strong operating performance led by gross margin expansion of 590bp (to 43.7%) in 3QFY22. The result was especially driven by its Tea business. However, higher A&P spends (which is expected to continue) and other expenses restricted EBITDA growth to 28%. India Foods margin was impacted by inflation and investments in new businesses. Management guided for sustained investments in the business to enhance its product portfolio. Revenue/EBITDA for 3QFY22 came in above our estimates. Factoring in the same, we increase our EBITDA for FY22E by 4% and largely retain our FY23E & FY24E. Further, we retain our earnings estimates and arrive at our SoTPbased TP of INR910, implying 23% upside potential. Maintain BUY.