Tata Consumer Q4 Results Review: Analysts Flag Margin Pain From Input Costs But Back Long-Term Growth

Citi retained a ‘buy’ rating on the stock and raised target price to Rs 1,325 apiece from Rs 1,200. This implies a potential upside of 15.3%.

The results were in line and highlighted that the company started disclosing its quarterly UVG, pegged at 6%, as a positive structural development. Citi attributed the drop in Ebitda in the India business to high tea costs, adding that price hikes covered only 46% of the inflation due to downtrading.

The brokerage expects near-term margin pressure to persist, but foresees a recovery in the second half of fiscal 2026, helped by commodity cost moderation. Long-term, it remains constructive on the growth story across both core categories like tea and salt and newer segments such as staples, snacks, condiments and supplements.

Citi expects 11% revenue and 23% earnings growth CAGR over financial year 2025 to 2028, and values the stock at 60 times its estimated earnings for financial year 2027.

Jefferies downgraded the stock to ‘hold’ from ‘buy’ with a target price of Rs 1,100 apiece, implying a downside of 4.36%.  

While revenue growth was strong, underpinned by the 6% underlying volume growth and M&A-led portfolio gains, Jefferies flagged that margins were hurt by elevated input costs, especially in tea. The brokerage had upgraded the stock as recently as January, but cited stretched valuations and continued cost pressure for its revised stance. 

Management commentary on tea prices turning favourable in the upcoming cycle was noted as a positive, but near-term profitability remains under strain, according to the brokerage. The growth was also supported by the unbranded segment, which benefited from high coffee prices, though margins remained subdued across verticals, it said.

JPMorgan retained a ‘neutral’ rating on the stock and raised target price to Rs 1,100 apiece from Rs 970, implying a downside of 4.36%. 

The results were broadly in line with expectations. The 6% UVG and price-led gains drove organic revenue growth, but high tea cost inflation led to a 360 basis point decline in India Ebitda margin.

The brokerage expects margins to recover in the second half of fiscal 2026, citing seasonal softening in tea prices and an expected good harvest. Tata Consumer passed on around 45% of the tea cost inflation in the March quarter, while early signs of a shift toward premiumisation were visible in consumer behaviour.

Retained a ‘buy’ rating on the stock and raised target price to Rs 1,335 apiece from Rs 1,300, implying an upside of 16.08%. 

The performance was in line with expectations, but has noted a slight earnings cut of 1.3% and 1.7% for financial year 2026 and 2027, respectively. India tea volume rose 2%, slightly below estimates, while salt grew 5%, in line with expectations.

The brokerage also noted competitive pressure in Tata Sampann and warns of rising intensity in tea and salt from private labels and existing players. Strong market positioning should help mitigate some of the near-term margin pressures, Nuvama said.

Analysts expect margins to stay under pressure in the near term but see recovery from the second half of financial year 2026 as tea costs ease. Long-term growth confidence among the brokerages remains strong, supported by steady volume gains and new category expansion.