Tata Consumer Q3 Results Review — Margin Pain Has Not Gone But Easing, Says Yes Securities, Maintains 'Buy'

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Yes Securities Report

Tata Consumer Products Ltd. Q3 FY25 operating performance was impacted by sharp tea inflation in the India business. On topline front, core businesses posted a smart recovery in Q3 FY25. In the coming quarters, along with pricing growth in tea and salt, execution benefits especially from distribution should start aiding topline growth.

This quarter saw the peak pressure from tea inflation as benefits of price hike in tea portfolio will start supporting margins going forward even while high tea cost is locked for two more quarters.

Further price action in tea and output of new tea crop along with competitive intensity especially in beverages will remain a key monitorable in near-term. Even in a difficult environment, it continues to execute on its strategic priorities (strengthening general trade, driving new channels, innovations, etc.).

We thus remain fundamentally positive and maintain our Buy with a revised target price of Rs 1,200 (Rs 1,325 earlier).

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