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Prabhudas Lilladher Report
Tata Consumer Products Ltd. has undertaken several initiatives to improve their presence in the fast moving consumer goods space through - increase in distribution (direct reach of 1.5 million in FY23 versus 0.5 million in FY20),
focus on large categories such as Tata Sampann (pulses, spices and dry fruits),
entry into high growth categories with Soulfull (breakfast cereals, mini meals and snacking options),
Nourishco: two times increase in capacity significant ramp up in distribution and new innovations,
improving management bandwidth with merger of Tata Coffee with Tata Consumer Products and
acquisitions in niche product offerings.
We believe Tata Consumer will continue to focus on distribution expansion across segments - more so in NourishCo and taking Tata Sampann deeper in general trade. We expect NourishCo, Tata Soulfull and Tata Sampann to grow in high double digits and increase their share in sales from current 15% in coming years.
We believe steady growth in core tea business and sustained traction in high growth segments will enable Tata Consumer Products to report strong growth in coming years. The stock trades at 44.7 times FY25 consensus earnings per share.
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