Tata Consumer spurts as foreign broker upgrades to 'buy'

Tata Consumer Products shares surged 7.25% to Rs 1063.85 after a foreign broker upgraded the stock to a 'buy' rating and raised its target price from Rs 1,040 to Rs 1,200.

The foreign broker said that Tata Consumer Products is poised for strong growth in its Earnings Per Share (EPS) over financial years 2025-2027. It also expects the company's tea margin to recover aided by price hikes. It also highlighted the companys aggressive innovation and distribution expansion in its growth segments.

Another key factor boosting confidence in the stock is a decline in net interest costs, as Tata Consumer continues to pay down its acquisition-related debt. While competition in the sector remains a challenge, the brokerage noted that the worst may be over for the stock, further strengthening its investment outlook.

Tata Consumer Products is a focused consumer products company uniting the principal food and beverage interests of the Tata Group under one umbrella.

The company's consolidated net profit was flat at Rs 278.88 crore in Q3 FY25 as against Rs 278.87 crore in Q3 FY24. However, revenue from operations jumped 16.82% year on year (YoY) to Rs 4,443.56 crore in the quarter ended 31 December 2024.

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