Shares of Tata Consumer Products Ltd (TCPL) will be in focus in trade Thursday after the fast-moving consumer goods (FMCG) major reported better topline than estimate across all three segments. The Tata Group company's EBITDA rose 26% year-on-year, revenue was up 10% on-year, in-line with estimates. However, net profit fell 17.3% on-year.
Global brokerage firm Morgan Stanley has maintained its 'Overweight' rating on Tata Consumer, with a target price of ₹1,305 per share. The brokerage said the company's topline was better than estimate across all three segments.
Tata Consumer reported strong improvement in margins led by India branded food and beverage business. Their share in India branded business rose to 17% as against 13% in the third quarter of last financial year (Q3FY23).
India business: India beverages business grew 8% YoY, with tea volumes growth of 2% YoY. India foods grew by 13% YoY with 5% volume growth. TCPL witnessed a marginal dip in market share in salt (10 basis points); however, salt saw its highest-ever monthly market share in December. It lost market share in tea, volume dip of 20 bps and value dip of 70 bps.
Ecommerce: The company's ecommerce sales now accounts for 10.7% of the India business. TCPL continued to retain its market leadership in tea in the e-commerce channel.
Growth Portfolio: NourishCo grew 34% YoY. Himalayan, Tata Gluco+ and Tata Copper+ continued to record strong growth. Tata Sampann portfolio recorded a robust growth of 40% for the quarter with robust volume growth. Growth businesses (combined) grew 42% YoY.
TCPL continues to premiumise its portfolio with premium and sub-premium brands growing faster than popular and economy brands.
Tata Starbucks JV now has 392 stores across 55 cities; and company has added 59 net new stores so far this fiscal.
International: International business grew 11% YoY (6% CC) with EBIT growth of 23%. In the UK, teapigs and Good Earth continued to deliver strong growth. In the USA, Good Earth and teapigs continued to outpace category growth rates.
"Overall, the worst seems to be behind for the India tea business and international margins," said domestic brokerage house Nuvama Institutional Equities while retaining a 'Buy' call with a target of ₹1,255 a share.
"We will revisit our estimates and target price post the earnings conference call," Nuvama said.
Shares of Tata Consumer Products Ltd gained 0.61% to settled at ₹1,170.70 apiece on Wednesday. The scrip has risen 8.39% so far this year.
First Published: Feb 8, 2024 9:13 AM IST
Note To Readers
Disclaimer: The views and investment tips expressed by investment experts on CNBCTV18.com are their own and not that of the website or its management. CNBCTV18.com advises users to check with certified experts before taking any investment decisions.
Check out our in-depth Market Coverage, Business News & get real-time Stock Market Updates on CNBC-TV18. Also, Watch our channels CNBC-TV18, CNBC Awaaz and CNBC Bajar Live on-the-go!
Supreme Court says it may consider interim bail for Arvind Kejriwal due to ongoing Lok Sabha polls
May 3, 2024 4:57 PM
10% discount on fare on Mumbai Metro lines 2 and 7A on May 20
May 3, 2024 2:40 PM