23 hours Ago
Tata Consumer Products' share price on April 2 surged more than 8% as Goldman Sachs upgraded its rating to 'Buy'. The brokerage firm also raised the price target on the stock to ₹1,200 from ₹1,040, implying an upside of 21% against the stock's last close at ₹992.25.
Investors reacted to the news in a bullish fashion, boosting it to an intraday high of ₹1,073.15. Tata Consumer stock opened at ₹1,018 before reaching a high of ₹1,073.
15 and a low of ₹1,015 during the day. Trading volume reached 5.44 million shares, much higher than its 20-day average volume of 1.
11 million shares. The market capitalization of the stock now stands at ₹1,05,539 crore. Despite today's rally, the stock still remains 14% lower than its 52-week high of ₹1,262.
60 but has bounced back over 21% from its 52-week low of ₹882.90. The beta of the stock is 0.
61, which means relatively lower volatility in comparison to the overall market. Goldman Sachs upgraded Tata Consumer Products to 'Buy' on the back of robust earnings growth potential for the company over FY25-FY27. The major drivers of this positive outlook are: Recovery in Tea Margins: Goldman Sachs is expecting improved tea margins, supported by price hikes and cost-saving initiatives.
Expansion in Distribution and Innovation: The company is expanding its product offerings and enhancing distribution, enhancing its growth potential. Improved Financials: Tata Consumer Products is deleveraging its acquisition-related debt, resulting in reduced interest costs and enhanced profitability. Despite the intense competition in the FMCG sector, Goldman Sachs feels that Tata Consumer Products has ridden out cost pressures.
Thus, it is now set for sustained long-term growth. In its third-quarter results for FY25, Tata Consumer Products recorded a net profit of ₹279 crore, which was the same as the corresponding period last year. On the other hand, revenue from operations rose 17% year-on-year to ₹4,444 crore.
The consolidated EBITDA of the company was ₹578 crore, recording no growth from the previous year. The absence of earnings growth was due to Indian tea cost inflation, which had a bearing on profitability even with increased revenue levels. The stock of Tata Consumer Products has seen fluctuating performance over the last one year.
While the stock is down 7.5% over the last 12 months, recent trends indicate increased investor interest. In January 2025, the stock jumped 12%.
In February, it fell 6% as the market was volatile. In March, the stock regained 4%. Today, the stock jumped more than 8%, indicating high buying demand.
The recent upgrade means Tata Consumer Products has excellent long-term prospects, especially as it continues to concentrate on building margins and product innovation. Shareholders should now closely follow its upcoming earnings report for additional validation of its growth trend..
