 "Tata Consumer rallies 4% on heavy volumes post price cut of tea brands")
Tata Consumer Products share price
Shares of Tata Consumer Products (TCPL) hit an over two-month high at ₹1,135.10, as they rallied 4 per cent on the BSE in Wednesday’s intra-day trade after the company announced price reductions across most of its tea brands, driven by a decline in bulk tea prices.
The stock price of Tata Group company was quoting at its highest level since June 27, 2025. It had hit a 52-week high of ₹1,234.50 on September 17, 2024.
The average trading volumes at the counter jumped over four-fold. A combined 2.84 million equity shares changed hands on the NSE and BSE.
Tata Consumer rolls out price cuts across many of its tea brands
According to a Business Standard report, TCPL has rolled out price cuts across many of its tea brands with the softening of bulk tea prices.
The company expects this to continue through Q3 FY26 as new stock flows in. Data from the Tea Board shows the average price of North Indian tea falling to ₹205.50/kg (up to August 2025) from ₹222.37/kg in the same period last year, a correction of 8 per cent year-on-year (YoY).
Last year, bulk tea prices appreciated significantly on the back of lower production. That had impacted margins of packaged tea players.
The price cut by TCPL is in-line with the management guidance given during Q1FY26 where it expected the tea prices to correct by ~10 per cent in July-August 2025 on the back of improved rainfall. Out of a total 30 per cent tea price increase in FY25, Tea prices were already down 13 per cent in Q1FY26 and with an additional 8 per cent price cut, the company is now left with the last leg of the tea price correction. Also, it expected the gross margins of tea to recover to the range of 34-37 per cent in Q3FY26, according to ICICI Securities.
The brokerage firm expects the price cuts aligns well with the company’s target of achieving the desired margins as it can lead to enhanced revenue growth driven by better volumes while the lower input costs will help in driving gross margins. Also, the price cuts won’t have much impact as TCPL had already passed on bulk of tea price increase to consumers in the previous quarters.
Meanwhile, FMCG (fast moving consumer goods) companies could see an improvement in their gross profit margin in the second and third quarters of fiscal 2026 (Q2FY26 and Q3FY26), according to a note by Nomura, amid soft commodity prices. The brokerage has suggested ‘Buy’ on Tata Consumer Products for target of ₹1,300 per share.
Analysts at Nuvama Institutional Equities also have a ‘Buy’ rating on TCPL with a 12-month target price of ₹1,285. TCPL expects EBITDA growth to be higher than revenue growth H2FY26 onwards. EBITDA margin to revert to historical levels (14 per cent to 16 per cent) from Q2FY26 due to potential moderation in tea prices. The company expects mid-single-digit volume growth in the tea business, with 6–8 per cent value growth. Ready-to-Drink (RTD) business shall deliver 30 per cent growth in top line in FY26E. IMD has forecasted normal rainfall in Northeast, which shall lead to stable crop, the brokerage firm said in the Q1 result update.