Sharekhan has given Buy recommendation for Tata Consumer Products with a target price of Rs. 960 in its research report issued on Feb 03, 2022

Sharekhan’s research report on Tata Consumer Products

Tata Consumer Products Limited’s (TCPL) Q3FY2022 performance was largely in-line with expectation with mid-single digit revenue growth; OPM expanded 262 bps to 14.4%, resulting in 20%+ PAT growth. Steady volume growth in core businesses of foods and branded tea and sustained gains in market share along with TCPL’s strategic priorities of increasing the direct coverage (targets 1.3mn outlet by March 2022), scale-up in new acquired businesses, and adding innovation on various platforms/markets would be key revenue drivers in the medium term. Benefits of correction in raw tea prices would sustain going ahead. This, along with better mix would enable margin improvement to sustain.

Outlook

The stock is currently trading at 52.3x and 42.9x its FY2023E and FY2024E earnings, respectively. We maintain Buy with an unchanged PT of Rs. 960.

 

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