Tata Consumer Products Ltd reported a 5% YoY decline in consolidated net profit to ₹299.75 crore in Q3 FY25, down from ₹316 crore in the same period last year. However, the company’s revenue from operations grew 16.8% YoY to ₹4,444 crore, driven by 10% growth in the India business, 4% in international markets, and 8% in the non-branded segment. Excluding acquisitions, revenue growth stood at 9% YoY.
Operational performance
Operating performance in India was impacted by tea cost inflation, but this was offset by better margins in the international and non-branded businesses. Consolidated EBITDA remained flat YoY at ₹578 crore.
- India Beverages segment recorded 9% revenue growth, while the coffee segment saw a 28% increase.
- India Foods business revenue surged 31% YoY, driven partly by the newly acquired Capital Foods.
- The company’s value-added salt portfolio grew 31%, and the Tata Sampann portfolio expanded by 23% for the quarter.
- International business revenue grew 8%, supported by improved profitability.
- Tata Starbucks added 16 net new stores, bringing the total count to 473 across 74 cities.
Brokerage updates
Brokerages remain mixed on Tata Consumer Products post-Q3 earnings, with target prices ranging from ₹1,040 to ₹1,250:
Nomura maintained a ‘Buy’ rating with a target price of ₹1,250, citing volume growth in tea and a strong price hike to boost overall growth. The brokerage noted that the growth business expanded 89% YoY, and operating margins (OPM) are expected to improve going forward.
Goldman Sachs maintained a ‘Neutral’ rating with a target price of ₹1,040, stating that Q3 FY25 results were below estimates. The firm highlighted sharp margin decline in the India business driven by tea inflation, which is expected to persist over the next few quarters. However, Tata Consumer delivered stronger volume growth than HUL in the tea business.
Jefferies maintained a ‘Buy’ rating but cut its target price to ₹1,100 from ₹1,130, noting that the company delivered on growth but missed on margins. The firm pointed out that recent acquisitions have stabilized, and the focus is now on growth. However, NourishCo’s performance remained muted, leading to an EPS cut of 4-8% for FY25-27E due to lower margin assumptions.
Stock performance and key metrics
Tata Consumer’s stock was trading at ₹1,006.55, up 4.12%, from the previous close of ₹966.70 as of 10:13 AM. The stock hit an intraday high of ₹1,020.00 and a low of ₹967.90. The stock’s 52-week range stands at ₹882.90 – ₹1,256.44. The trading volume stood at 18.34 lakh shares, with open interest at 2.07 crore shares.
Disclaimer
The information provided is for informational purposes only and should not be considered financial or investment advice. Stock market investments are subject to market risks. Always conduct your own research or consult a financial advisor before making investment decisions.
