Sharekhan has given Buy recommendation for Tata Consumer Products with a target price of Rs. 740 in its research report issued on May 07, 2021
Sharekhan’s research report on Tata Consumer Products
In Q4FY21, Tata Consumer Products (TCPL)’s margins missed the mark and stood at 9.9% (vs. our street expectation of 11-12%); Revenue growth stood strong at 26% to Rs. 3,027 crore while Adjusted PAT stood at Rs. 181 crore (vs. our and street expectation of Rs. 190-195 crore). India beverages business grew by 60% (volume growth of 23%); India foods biz revenues rose by 22% (volumes grew 21%), while Tata Coffee saw a 31% largely volume-led growth. Tata Starbucks became EBIDTA Positive in FY2021; business recovered to 98% in February. Demand for staples/ daily consumption item to remain stable in the coming months. However, local lockdowns and restricted business hours might lead to near-term supply disruptions; domestic tea prices are likely to moderate in new crop season. We have reduced our FY22 earnings estimates by 4%, while we broadly maintain them for FY2023.
We maintain our Buy recommendation with target price of Rs. 740.