Tata Consumer Shares Gains Despite Q1 Profit, Revenue Miss

Shares of Tata Consumer Products Ltd. traded 3.94% higher on Thursday after the company reported first-quarter earnings. The results however fell short of market expectations.

The FMCG major posted a consolidated net profit of Rs 334 crore for the April–June quarter, up 15% year-on-year but below the Rs 355 crore projected by analysts. Revenue rose 9.8% to Rs 4,779 crore, also missing the Bloomberg consensus estimate of Rs 4,813 crore. Operating profit declined 9% to Rs 607 crore, with margins narrowing to 12.7% from 15.3% a year earlier.

The margin compression was attributed to rising input costs, particularly in tea and coffee, and weaker performance in international and non-branded segments. The company also faced headwinds in its ready-to-drink beverages business due to unseasonal weather, while growth ventures like Organic India and Capital Foods saw muted traction.

Citi maintained a “Buy” rating but trimmed its target price to Rs 1,275 from Rs 1,325, citing weak Q1 performance and the need for margin recovery in the second half of the fiscal year. It flagged profitability concerns and said it would monitor the pace of recovery in NourishCo and Capital Foods.

Morgan Stanley remained more optimistic, retaining its “Overweight” stance and raising its target price to Rs 1,255. It described the results as “mixed,” but expects sequential margin improvement and stronger performance by Q3. The brokerage noted that core business value growth remained solid, even as growth segments underperformed.

Tata Consumer, part of the Tata Group, is a diversified food and beverage company with operations spanning branded tea, coffee, salt, pulses, and packaged foods. It is among the top FMCG players in India and holds leading market positions in tea and salt.