Tata Consumer Products hits new high on 82% jump in Q1 profit, slips later

Shares of Tata Consumer Products hit an all-time high of Rs 471.70 apiece on the BSE on Wednesday, a day after the company reported an 81.78 per cent year-on-year (YoY) rise in its net profit at Rs 345.55 crore for the quarter ended June (Q1FY21), aided by an increase in demand in some categories.

However, the stock erased its morning gains and slipped 1.6 per cent to Rs 442.55 in the afternoon session against Tuesday's close of Rs 449.75. From the day's high, the stock declined 6 per cent. 

For the quarter under review, revenue from operations was up 13.44 per cent to Rs 2,713.91 crore as against Rs 2,392.36 crore in the corresponding period of the last fiscal.

Tata Consumer Products has acquired a 50 per cent stake of PepsiCo India in NourishCo Beverages Ltd, making it a wholly-owned subsidiary with effect from May 18, 2020, and hence TCPL has shown a gain of Rs 84 crore, it said. CLICK HERE TO READ FULL REPORT

Analysts at ICICI Securities expect steady improvement in earnings before interest, taxes, depreciation, and amortisation (EBITDA) margin in FY21-22 due to the rising share of higher-margin branded products in India, revenue and cost synergy benefits, savings in distribution and cost-saving initiatives, and lower input prices.

While Starbucks operations continue to be impacted due to lockdown, 60 per cent of 186 stores have reopened now. "While we expect a gradual recovery in Starbucks business activities, we model losses in FY21," the brokerage said in a result review note. 

It maintains an "ADD" rating on the stock with the target price of Rs 450.