Connect with us

Hi, what are you looking for?

Share Market

Tata Consumer Products: Maintain ‘buy’ with a revised TP of Rs 880

Financial Express - Business News, Stock Market News

To strengthen its portfolio and remain aggressive on acquisitions.

Tata Consumer Products (TCPL) is trading near its all-time high, having run up 32% since our initiation about five months ago. In this report, we are highlighting the takeaways from the company’s AGM, including the focus on expanding its online and offline distribution to drive the next leg of growth. Tea price correction, likely over the next two months, is a key variable. A potential YoY moderate correction in tea prices is likely, but prices are likely to be higher than the level two years ago. The new leadership has infused vigour in execution. And, on the whole, we remain quite positive on the stock over the medium to long term. Maintain ‘buy’ with a revised TP of Rs 880.

Top eight takeaways:
Portfolio: To strengthen its portfolio and remain aggressive on acquisitions. Eight O’Clock Coffee: Set for India launch DTC model (e-commerce) this week. Immunity health products: An area of focus; launches to follow. Distribution: TCPL will ensure availability despite the second wave. The company is taking steps to make products available everywhere and at all times. Non-core businesses: The company would continue to evaluate and exit them. Starbucks: Will continue to expand it aggressively—39 stores opened in FY21. E-commerce and synergies: TCPL plans to leverage the Tata super app to raise its e-commerce game. The Tata group has acquired a majority stake in online retailer BigBasket, which TCPL would leverage. Capex plan: Rs 3.5–4billion per year. Outlook and valuation: Favourable base widening; maintain ‘buy’ TCPL’s core businesses — salt and tea — should feed its steady revenue momentum while new businesses—pulses & spices—should provide the revenue fillip. The company has sharpened the focus on its key geographies and simplified its business model by exiting non-core markets and businesses. Progress on Sampann remains a key driver for long-term growth, although Q4FY21 disappointed. Integration of the Food & Beverage (F&B) business has widened the direct coverage of outlets by 30% while integration of the F&B CFA network has led to cost reductions. We retain ‘buy/so’ with a revised TP of Rs 880 (earlier Rs 770) while rolling forward the valuation to Dec-22E.
The stock is trading at 44.8x FY23E EPS.

Get live Stock Prices from BSE, NSE, US Market and latest NAV, portfolio of Mutual Funds, Check out latest IPO News, Best Performing IPOs, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Financial Express is now on Telegram. Click here to join our channel and stay updated with the latest Biz news and updates.

Click to comment

Leave a Reply

Your email address will not be published.

You May Also Like


Cybercriminals Adopt the Blockchain to Broadcast confidential Messages A group of analysts from SophosLabs represents that programmers working the crypto-jacking malware, Glupteba, have been...


PUBG unban in India soon as PUBG Corp. Will The Government Of India Unban PUBG? PUBG Mobile was Ban in India, PUBG organization has...


A standard method to execute Bitcoin could be powerless against double-spending, the new examination has found. Blockchain sleuths at ZenGo, a wallet startup, have...

BlockChain News

HDD mining, also known as “storage mining”, is a process of obtaining cryptocurrency based on hard disk memory. Compared with traditional POW mining, hard...