Tata Consumer Q2 Review: Brokerages Up Target Price Though Margins Contract — Here's Why
Tata Consumer Q2: The FMCG major reported a double digit increase in both revenue and net profit for the September quarter.
Shares of Tata Consumer Products Ltd. are in focus in trade on Tuesday after brokerages raised their target prices, on the back of strong sales growth in the company's India business.
The FMCG major reported a double digit increase in both revenue and net profit for the September quarter. Its consolidated net profit rose 11% in the second quarter of fiscal 2026. TCPL posted a bottom line of Rs 404 crore, according to an exchange filing on Monday. That compares with the Rs 364-crore net profit posted in the second quarter of FY25.
The topline for Tata Consumer in the second quarter stood at Rs 4,966 crore, which accounts for a 17.8% increase on a year-on-year basis. Margin, though, saw a contraction of 140 basis points, falling to 13.5% compared 14.9% for the same period last fiscal.
The India Foods segment saw a 19% jump, led by a 40% surge in its Tata Sampann portfolio and 23% growth in value-added salt.
The India Beverages segment grew 12%, powered by a 56% rise in its coffee business and 25% growth in its ready-to-drink (RTD) portfolio.
Brokerages' View
CLSA stuck with its 'hold' call on the counter, slightly upping its target price to Rs 1,097.
Though margins contracted, missing CLSA's estimates, the brokerage raised its target price on the back of strong sales growth, as per their latest note. The beat across other estimates was driven by the growth of the tea and salt verticals, says CLSA.
Jefferies also has a similar outlook on the stock, setting its target price at Rs 1,210. The brokerage believes uncertainty owing to tariffs may prevail, and margins may take a quarter or more to normalise in the international segment.
However, the company's management sounded confident on growth and profitability for the India business, Jefferies stated.
