Goldman Sachs has upgraded its rating on Tata Consumer Products Ltd (TCPL) from ‘Neutral’ to ‘Buy’ and revised its 12-month target price to ₹1,200 from ₹1,040, signaling a potential upside in the stock amid strong growth tailwinds and improving margins.
The brokerage expects Tata Consumer to post robust EPS growth over FY25-27, supported by margin expansion, strong innovation, and distribution gains in its growth businesses. One of the key catalysts cited is the expected recovery in tea margins, aided by recent price hikes, which should support overall profitability.
Goldman Sachs also highlighted that the company’s acquisition-related debt is being gradually paid down, resulting in lower net interest costs. The firm believes these improvements, coupled with enhanced operational efficiency, will drive stronger earnings performance over the coming years.
While the competitive intensity in the FMCG sector remains a risk, Goldman Sachs noted that the worst appears to be behind for TCPL. The brokerage believes the company’s strategic initiatives, including innovation in new categories and expanding reach in rural and semi-urban markets, will continue to bear fruit.
The stock has been gaining investor interest in recent months due to its evolving product portfolio and increased focus on premium offerings and wellness categories.
Disclaimer: This article is for informational purposes only. Investors are advised to consult their financial advisors before making any investment decisions.
