Jefferies has maintained its Hold rating on Tata Consumer Products, while cutting the target price to Rs 1170 from Rs 1190, following another weak quarter. The brokerage expressed concerns over the company’s performance, particularly in its India business, which witnessed softness in both revenue and margins.
Key Highlights:
- Another miss: Tata Consumer faced yet another weak quarter, underperforming on both revenue and margin fronts, primarily driven by sharp input cost inflation in the tea business.
- EBITDA Decline: On a like-for-like basis, EBITDA was down by 23%, largely due to inflationary pressures in tea. The tea segment also saw a volume decline, further weighing on the company’s overall performance.
- Other segments: The salt business was a modest performer with near-flat volumes, while NourishCo, Tata’s beverages unit, also experienced modest trends.
- Acquisitions as a bright spot: Despite the weak performance in core segments, acquisitions stood out as a positive, with revenues from acquired businesses exceeding expectations, helping offset some of the weakness in the company’s other operations.
Jefferies remains cautious on the company’s near-term outlook, citing continued pressure on input costs and a slow recovery in volumes across key segments.
Disclaimer: This article is for informational purposes only and should not be construed as financial advice. Please consult a financial advisor before making any investment decisions.
