Source – indianretailer.com
Stock Upgrade Boosts Investor Confidence
Tata Consumer Products witnessed a significant rise in its share price on Wednesday following an upgraded rating from global investment firm Goldman Sachs. The brokerage firm shifted its stance on Tata Consumer Products from a ‘Neutral’ to a ‘BUY’ rating, leading to a surge in investor interest. As a result, the stock price climbed by 8.15% to an intraday peak of Rs 1,073.15 per share on the National Stock Exchange (NSE). Though some gains were trimmed, the stock was still trading strong at Rs 1,063.40, reflecting a 7.17% increase.
Goldman Sachs Raises Price Target
Goldman Sachs not only upgraded its rating but also increased its price target for Tata Consumer Products from Rs 1,040 to Rs 1,200 per share. The brokerage firm attributed its bullish outlook to the company’s expected strong earnings per share (EPS) growth over the next three financial years (2025-2027). Additionally, it highlighted a likely improvement in tea margins due to price adjustments, which are expected to enhance profitability. Tata Consumer Products is also aggressively innovating and broadening its distribution networks, which Goldman Sachs believes will support its long-term growth strategy.
Financial Performance and Market Trends
Despite the optimism from Goldman Sachs, Tata Consumer Products reported a 6% decline in group profit, which stood at Rs 282 crore, impacted by inflation in the tea segment and rising interest costs. On a quarter-on-quarter basis, its net profit fell 23% from Rs 367.2 crore in the previous quarter. However, the company showcased a robust 17% year-on-year revenue growth, reaching Rs 4,444 crore for the quarter ending December 31. This growth was primarily driven by strong performance in its India beverages and foods segments, which contribute nearly 70% of its overall revenue. As the company continues to expand its portfolio and strengthen its market position, investors remain optimistic about its future prospects.
