Sharekhan has given Buy recommendation for Tata Consumer Products with a target price of Rs. 960 in its research report issued on May 05, 2022

Sharekhan’s research report on Tata Consumer Products

Q4FY2022 performance was ahead of our expectation with mid-single digit revenue growth; OPM expanded 411 bps y-o-y to 14%, resulting in PAT doubling to Rs. 252.9 crore. 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 direct coverage, scale-up in new acquired businesses, and innovation would help drive up revenue growth in the medium term. Benefits of a correction in raw tea prices would sustain going ahead. Further proposed reorganisation of India and International business is on track. It will lead to 5-10% PAT accretion in the next 12-18 months.

Outlook

The stock trades at 56.2x and 46.1x its FY2023E and FY2024E earnings, respectively. We maintain Buy with an unchanged PT of Rs. 960.

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