Tata Consumer Products' Shares Surge Following Goldman Sachs' Upgrade

Synopsis: Tata Consumer Products Ltd. saw an 8% surge in its stock price after Goldman Sachs upgraded its rating and raised its price target. The company’s market capitalization reached Rs1.05 lakh crore, with a turnover of Rs22.74 crore on the BSE. Despite reporting a 17% revenue growth in Q3 to Rs4,443 crore, net profit remained flat at Rs279 crore, and EBITDA declined by 1.4% to Rs564 crore. Rising tea prices impacted margins, but Goldman Sachs remains optimistic about future growth, expecting a recovery in tea margins and EPS expansion. Tata Consumer continues to drive innovation and expand its distribution network, strengthening its position in the consumer goods sector.

Tata Consumer Products Ltd. (TCPL) witnessed a significant surge in its stock price, rising over 8% to Rs1,073.55 on the Bombay Stock Exchange (BSE) on Wednesday. The rise in stock value followed a positive revision by global brokerage Goldman Sachs, which upgraded the stock from 'neutral' to 'buy' while increasing the price target from Rs1,040 to Rs1,200 per share. This upgrade led to heightened market activity, pushing TCPL’s market capitalization to Rs1.05 lakh crore. A total of 2.16 lakh shares exchanged hands during the session, resulting in a turnover of Rs22.74 crore. The stock opened at Rs1,010.05 on BSE before experiencing its upward rally.

For the third quarter of the current fiscal year, TCPL reported a 17% increase in revenue on a year-on-year basis, reaching Rs4,443 crore. However, despite the strong revenue growth, the net profit remained unchanged at Rs279 crore. The company’s Earnings Before Interest, Tax, Depreciation, and Amortization (EBITDA) fell slightly by 1.4% from the previous year to Rs564 crore, with an EBITDA margin of 12.7%. The impact of rising expenses, particularly due to increased Indian tea prices, restrained both profit and margins. Consolidated EBITDA remained flat at Rs578 crore, as the cost pressures offset the benefit of higher sales.

Goldman Sachs projects a strong growth trajectory for TCPL’s Earnings Per Share (EPS) in the financial years 2025-2027, expecting a recovery in tea margins backed by strategic price hikes. The brokerage highlighted that TCPL is actively driving innovation and expanding its distribution network in key growth segments.

Tata Consumer Products operates in the consumer goods sector, with a diverse product portfolio that includes tea, coffee, water, salt, pulses, spices, snacks, and ready-to-eat packaged food. The company’s shares are currently trading above their 5-day, 10-day, 20-day, 30-day, 50-day, 100-day, 150-day, and 200-day simple moving averages, indicating a strong bullish trend in the market.

Disclaimer: This article is for informational purposes only and should not be considered financial advice. Investors are advised to conduct their own research or consult a professional before making any investment decisions.