Over the last year, shares of Tata Consumer Products have increased by 74.75%. On Thursday, the counter was last seen at Rs 1,201.30. In a recent report, Nuvama Institutional Equities maintained a “Buy” call on the counter, albeit with a revised 12-month target price of Rs 1,400 as opposed to Rs 1,340.
According to the domestic brokerage, the Tata Group company keeps growing by expanding its distribution network, adding new products to its portfolio, and venturing into uncharted territory.
Tata Consumer shares rise by 75% over a year; Nuvama projects stock hitting Rs 1,400
In India, e-commerce currently accounts for 10.7% of total business. For the thirty-third consecutive month, Tata Consumer continued to lead the e-commerce tea market. Up until last year, consumers were down-trading the company because branded tea was experiencing inflation. But in recent quarters, tea prices have started to decline and positive volume trends have begun, thanks in part to proactive measures, according to Nuvama.
“The company had previously increased salt prices dramatically, but at this point, salt prices are stable and volume sales have begun to increase. The FY24 target of NourishCo is between Rs 900 and Rs 1,000 crore. Because of North India’s seasonality, Q3 is a slow quarter. The number for Q4 would increase as summer approaches. Tata Copper, Himalayan, and Tata Gluco all experienced robust growth, with Copper expanding more quickly than Gluco. Fifty percent of NourishCo’s revenue comes from water,” the statement continued.
Also read | Tata Consumer Products reports Rs 3,803.9 cr in revenue for Q3
The business declared that it is open to acquiring more companies after purchasing Capital Foods and Organic India. An executive at the top of the company stated that the company will concentrate on making new acquisitions that have operational value. It intends to run a specialized pharmaceutical distribution network using products from Organic India, such as triphala, ashwagandha, and tulsi capsules.
According to Nuvama, the business has shown interest in a number of platforms, including proteins and pantry and mini meals.
The brokerage added that within 100 days, Tata Consumer wants to incorporate its two most recent acquisitions, Organic India (Rs 1,900 crore) and Capital Foods (Rs 5,100 crore), into the company.
“The percentage of growth business to India business is currently 17%; by the end of FY24, it will have contributed 20% of revenue. The goal is to end FY24 with growth business making up 30% of India business. Growth businesses’ profitability is still significantly improving. Growth businesses increased 42% year over year (YoY) in Q3 FY24, according to Nuvama.
Promoters owned 33.56 percent of Tata Consumer as of December 2023.
(Disclaimer: Businessuncover does not offer investment advice; rather, it merely offers stock market news for informational purposes. It is recommended that readers seek advice from a licensed financial advisor prior to making any investment decisions.)
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