Tata Consumer Products shares rise 4% post Q1: Should you stay invested?

Tata Consumer Products Q1 review: In the June quarter (Q1FY26), Tata Consumer Products registered a 15 per cent jump in the consolidated net profit; here's what brokerages recommend

Tata Consumer Products Q1 review: Tata Consumer Products (TCPL) shares rose 3.9 per cent in trade, logging an intraday high at ₹1,104.8 per share on BSE. The buying on the counter came after the company reported its Q1 numbers on Wednesday, after market hours. 

 

At 9:19 AM, TCPL share price was trading 3.1 per cent higher at ₹1,095.55 per share on BSE. In comparison, BSE Sensex was down 0.11 per cent at 82,639.14. The market capitalisation of the company stood at ₹1,08,373.74.

Tata Consumer Products Q1 results 

In the June quarter (Q1FY26), Tata Consumer Products registered a 15 per cent jump in the consolidated net profit year-on-year (Y-o-Y) to ₹334.15 crore as compared to ₹290.32 crore. Its revenue from operations stood at ₹4,778.91 crore, up 9.8 per cent, from ₹4,352.07 crore a year ago. The company's Earnings before interest, tax, depreciation and amortisation (Ebitda) declined 8 per cent to ₹615 crore, as against ₹671 crore a year ago.  

Brokerages’ view on Tata Consumer Products Q1 numbers 

Nuvama Institutional Equities has maintained a ‘Buy’ call on Tata Consumer Products, but has cut the target price to ₹1,285 per share from ₹1,335 owing to the company posting below-estimate revenue and a fall in Earnings before interest, tax, depreciation, and amortisation (Ebitda) and Ebitda margins. 

 

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Tata Consumer Products reported Q1FY26 revenue growth of 9.8 per cent, which was slightly below Nuvama’s expectation. Earnings before interest, tax, depreciation and amortisation (Ebitda) declined, and margins contracted sharply with gross margin down 482 basis points (bps) and Ebitda margin down 263 bps Y-o-Y, impacted by elevated tea costs and coffee price corrections in the non-branded segment, according to Nuvama.  ALSO READ | Dr Reddy's Laboratories Q1 print misses target; brokerages split on outlook 

Similarly, Motilal Oswal continued with ‘Buy’, but cut the target to ₹1,270 per share from ₹1,300. However, it raised FY26/FY27 Ebitda estimates by 7 per cent/3 per cent. The brokerage sees moderation in tea prices to support margin expansion from Q2FY26 and expects international business to sustain FY26 performance. 

 

In Q1, the company’s international business revenue grew 5 per cent in constant currency terms, driven by strong coffee performance in the US. Besides, the India food business revenue also grew over 14 per cent, and its value-added salt portfolio grew 31 per cent.  ICICI Securities also iterated its ‘Add’ rating with no chnage in target price of ₹1,220 per share. The brokerage believes that margin headwind is bottoming out and is expected to recover in H2FY26.

Tata Consumer Products management commentary 

The management of the Tata group company expects Ebitda growth to be higher than revenue growth H2FY26 onwards and Ebitda margins to revert to historical levels Q2FY26 onwards due to potential moderation in tea prices.

 

Further, a mid-single-digit volume growth in the tea business, with 6–8 per cent value growth, is expected going ahead. The company is aiming to increase Advertising and Promotion (A&P) spends to 7.5 per cent of revenue in the near term (6.8 per cent of revenue in Q1FY26).   ALSO READ | Analysts stay bullish on Infosys after steady Q1 show; Should you buy in? 

Capital Foods and Organic India is anticipated to grow 30 per cent Y-o-Y in FY26 and the ready-to-drink (RTD) business is expected to deliver 30 per cent top-line growth in FY26, driven by volume and product launches. The company aims to expand its growth business to 30 per cent of India business (currently at 28 per cent in Q1) and to expand value-added Stock Keeping Units (SKUs) of dry fruits to enhance margins.