 "Tata Consumer back in high-growth lane; analysts raise targets on strong Q2")
Brokerages turned increasingly upbeat on Tata Consumer Products Limited (TCPL) after the company posted a strong set of numbers for the September quarter of FY26, signalling a firm revival across core categories and emerging growth segments.
Analysts believe the consumer goods major is reclaiming its high-growth momentum under CEO Sunil D’Souza, backed by strong execution, premiumisation, and sustained innovation.
Nuvama said ‘blistering growth is back’ at the company after it reported an 18 per cent year-on-year (Y-o-Y) jump in revenue, in line with estimates, and a 7 per cent rise in Ebitda, which came ahead of expectations. The brokerage noted a healthy recovery in margins as easing tea costs helped boost profitability quarter-on-quarter (Q-o-Q). Gross and Ebitda margins expanded by 198 bps and 83 bps respectively to 42.1 per cent and 13.5 per cent.
Nuvama analysts Abneesh Roy, Jainam Gosar, Shlok Mehta and Anchal Jain highlighted that the India Tea business grew 12 per cent Y-o-Y, outperforming Hindustan Unilever’s growth in the category, while the Ready-to-Drink beverages segment witnessed strong traction despite unseasonal rains. RTD revenue rose 25 per cent and volumes grew 31 per cent year-on-year. Importantly, high-growth channels – e-commerce, quick-commerce and modern trade – now account for around 37 per cent of TCPL’s India business, strengthening its strategic foothold in emerging retail formats.
Given the momentum, Nuvama revised earnings estimates higher by 4 per cent each for FY26-FY28 and raised its target price to ₹1,470 from ₹1,285, reiterating a ‘Buy’ call.
Those at ICICI Securities also praised the company’s performance, calling it an ‘outlier outperformer’ poised to remain an industry growth leader. The brokerage said TCPL delivered an impressive 14 per cent underlying volume growth in Q2FY26, beating consensus expectations. It added that the quarter’s performance transported analysts back to the early 2010s, an era defined by high-trajectory growth among top consumer companies.
‘All businesses grew well,’ ICICI Securities analysts Manoj Menon, Dhiraj Mistry, Ashutosh Joytiraditya and Akshay Krishnan said in their joint review, pointing to a 9 per cent volume jump in the Salt category and 5 per cent growth in Tea volumes. The Sampann franchise continued to shine with a 40 per cent surge in revenues, supported by aggressive innovation and category expansion. Meanwhile, “new businesses” recorded 27 per cent revenue growth, further diversifying TCPL’s portfolio.
Analysts noted TCPL’s strong fundamentals under the current leadership and maintained its ‘Add’ rating, expecting continued execution strength and category leadership to drive long-term value creation. The brokerage also raised the target price to ₹1,300 from ₹1,220 earlier. CATCH STOCK MARKET LIVE UPDATES TODAY
Strong quarter across businesses
For the quarter ended September 30, 2025, TCPL reported consolidated revenue from operations of ₹4,966 crore, up 18 per cent Y-o-Y, supported by broad-based growth in both branded and emerging categories. Consolidated Ebitda came in at ₹675 crore, while net profit rose 11 per cent to ₹407 crore.
The India core business, Tea and Salt, delivered a second straight quarter of double-digit growth, marking a sustained turnaround after several soft quarters. Tata Sampann continued its leadership in health-focused foods and introduced new gravy masala mixes and a millet range during the period.
Innovation remained a key growth lever, with 25 new product launches during the quarter, including Tata Tea Agni’s category-first energy tea and multiple offerings from Capital Foods such as Korean Ramen and Chilli Oil.
International business gained 9 per cent in constant currency, buoyed by the strong performance of Eight O’Clock Coffee in the US and Tetley’s dominant market position in Canada.
Tata Starbucks expanded its retail footprint with seven new outlets, taking the store tally to 492 stores across 80 cities, while rolling out more experiential formats in metros and strengthening regional connect through a festive menu in East India.
CEO Sunil D’Souza said the company remains focused on growth, innovation and consumer trust, with continued investments in brand building, premiumisation, and scaling new categories.
With strong execution, rising contribution from high-growth channels, easing commodity pressures, and a robust innovation pipeline, brokerages see Tata Consumer well-placed to maintain its market-leading momentum in the coming quarters.