Tata Consumer Share Price Gains Over 1% After Q1 Profit Jumps 28%; Should You Buy, Sell or Hold?

FMCG major tata consumer products limited is currently in focus with its share today trading in the green zone after the company announced its Q1FY27 results post market hours on friday July 24th.

Shares of Tata Consumer Products opened at Rs. 1115.10 apiece on the NSE above the previous close of Rs. 1088; however, the stock surged to the intraday high of Rs 1123.40.

At the time of writing, Tata Consumer shares were trading at Rs. 1100.12 up by 1.12%

Tata Consumer Products Q1 Results

In the March to June quarter, Tata Consumer reported a 11.9% jump in revenue of Rs. 5,349 crore year-on-year.
Net profit surged 27.8% to Rs 427 crore, beating street estimates.

EBITDA was reported at Rs. 724.2 crore as per expectations, while EBITDA margin spiked 12.7% YoY and came in at 13.5%,

Systematix in its report dated 24th July said, that "Tata Consumer Products (TCPL) delivered 1QFY27 operating results broadly in-line with our/ consensus estimates, and maintained their growth/ margin outlook.Price cuts in India tea accounted for the gap, also causing India tea and coffee (c.25% of revenue) sales growth to decline 4% YoY despite volumes up by 2% YoY (impacted by harsh summer). Reiterating volume growth guidance of mid-single digits here, TCPL indicated small price hikes have already been taken in June vs. current tea cost inflation of 7-10%, and further hikes could be taken to support margins."

The company's India business revenue rose 13.3% YoY to Rs. 3,540.3 crore meanwhile the International business revenue rose 5% YoY, while non-branded business declined 10%.

According to the company The main reasons behind this Growth was by volume-led expansion, especially in branded segments. The Lower tea-cost pressure helped margin improvement in the quarter.

The Total expenses rose about 11% YoY to Rs .4,829 crore but the operating margin improved YoY but softened sequentially from the previous quarter.

Should You BUY/SELL/Hold? Brokerage Analysis

Systematix Research said in its report that Tata Consumer has a supportive margin outlook, but growth risks and rich valuations warrant caution.

"We also like the near/medium-term margin construct, with multiple levers on product mix improvement, pricing, cost efficiencies, operating leverage in play. However, downside risks to growth cannot be ignored as the key growth portfolios scale, any deceleration would make current valuations vulnerable (stock trades at P/E of 56x/ 48x on FY27E/ FY28E EPS). In addition, the tea segment remains volatile, susceptible to competitive pricing dynamics on one hand and input-cost vagaries on the other. With these considerations in mind, we maintain our balanced view on the stock with a HOLD rating."

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