Sharekhan has given Buy recommendation for Tata Consumer Products with a target price of Rs. 960 in its research report issued on Aug 31, 2021

Sharekhan’s research report on Tata Consumer Products

TCPL is progressing well on strategic priorities of increasing the direct coverage (targets 1mn outlets by Sept, 21), adding innovation on various platforms/markets (targets 3.5% of sales in FY22), and embed digitalisation across the value chain. Domestic raw tea prices are stabilising and declined by ~35% from their high in August-September 2020. Stable raw-material prices, price hikes in the beverages portfolio, and synergistic benefits from acquired companies would help in better margins from Q3. Steady volume growth in the foods and beverages business and margin expansion would enable TCPL to report revenue and PAT CAGR of 13% and 19%, respectively, over FY2021-FY2024.

Outlook

We maintain Buy on Tata Consumer Products Limited (TCPL) with a revised PT of Rs. 960. With strong growth prospects and sturdy cash flows (FCF/EBIDTA of 100%), TCPL is one of our top picks in the FMCG space.

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