Tata Consumer Products’ share price surged more than 6 per cent to the day’s high of Rs 994.85 on the NSE after the company’s earnings came in line with analysts’ estimates. However, the brokerage cut the target price on the stock over softer margin growth, while retaining its stock rating.
Elara Capital on Tata Consumer Products
The domestic brokerage house, Elara Capital, reiterated its ‘Accumulate’ rating on the stock. However, it cut the 12-month price target to Rs 1,080 from Rs 1,290, which came on the back of slower-than-estimated margin improvement. EBITDA margin expanded 40 basis points year-over-year to 14 per cent. The new price is based on 45x March FY28 P/E versus 54x earlier.
The global brokerage house, Citi, retained its earlier rating on the stock, Buy. It also cut its price target to Rs 1,225 from Rs 1,400, which came as India tea segment revenue remained soft and domestic margins faced inflationary pressure. However, the brokerage sees a clearer margin recovery path through H2 FY27, estimating 50 bps of EBITDA margin expansion.
The brokerage said that the FMCG company delivered another strong quarter. The growth construct remained healthy: India underlying volumes grew 11 per cent, salt volumes grew 9 per cent, and growth businesses increased 40 per cent. Stronger international and non-branded profitability provides further support at the consolidated level.
With growth businesses now contributing 38 per cent of India revenue and Capital Foods and Organic India sustaining strong domestic traction, the portfolio shift remains firmly on track. Citi said that it keeps FY27-29 earnings estimates largely unchanged.
Tata Consumer Products Q2FY27
The FMCG major reported a consolidated net profit of Rs 469.30 crore for the second quarter of the current financial year (Q2FY27), which was in line with ET Now’s estimates of Rs 468 crore. The company’s net profit surged 16 per cent year-over-year (YoY) from Rs 404.46 crore in Q2FY26.
The company’s revenue from operations surged to Rs 5,661.13 crore in Q2FY27, compared to ET Now’s estimate of Rs 5,583 crore. It advanced 14 per cent YoY from a revenue of Rs 4,965.90 crore recorded in Q2FY26.
On the operating front, the company’s Earnings Before Interest, Tax, Depreciation, and Amortisation (EBITDA) stood at Rs 783 crore, beating ET Now’s estimates of Rs 769 crore. The company’s EBITDA rose 16.6 per cent YoY from Rs 672 crore posted in Q2FY26. Its EBITDA margin expanded by 30 basis points to 13.8 per cent in Q2FY27 from 13.5 per cent recorded in the same quarter a year ago, which was in line with ET Now’s poll of 13.8 per cent.
The company’s India business’ revenue increased Rs 3,666 crore, as against Rs 3,122 crore recorded in the corresponding period a year ago, rising 17.4 per cent YoY. India business’ Underlying Volume Growth (UVG) came in at 11 per cent as against the estimates of 11-14 per cent.
Tata Consumer Products share price performance
The share price of Tata Consumer Products has risen almost 3 per cent in the last five trading sessions. The stock has declined over 2 per cent over the previous one month. Tata Consumer Products’ stock price has declined over 14% in the last 12 months.