Tata Consumer Share Price Surges 5.5% on Strong Q2 Show; Stock Rebounds From 52-Week Low

Tata Consumer Products shares surged 5.53% to Rs. 988.30 on Tuesday, October 27, adding Rs. 51.80 a share as investors reacted to a solid September-quarter performance. The rally came a day after the stock slipped to Rs. 936.50 ahead of the earnings announcement.

The shares closed at Rs. 936.5 on October 26, close to the lower end of a 52-week range of Rs. 916 to Rs. 1,282.7. Even after today's gain, the stock is still down 14.84%, or Rs. 172.20, over the past six months, and trades roughly 23% below its 52-week high.

Tata Consumer Products Q2FY27 Earnings

The numbers explain the buying. Tata Consumer reported Q2 FY27 revenue from operations of Rs. 5,661 crore, up 14% YoY, while EBITDA rose 18% YoY to Rs. 794 crore. Group net profit grew 16% YoY to around Rs. 470 crore. That was slightly ahead of expectations, since the average estimate of 11 brokerages was for net profit of about Rs. 466 crore, up 15%.

Volume growth was the strongest part of the report. The India branded business posted underlying volume growth of 11%, and the company's growth businesses expanded 40%, led by Tata Sampann, which grew 57%, and the ready-to-drink segment, which rose 47%. These are the segments the company has been betting on to lift its growth profile beyond the core tea and salt franchises.

Apart from that, earnings per share came in at Rs. 4.75, or Rs. 5.18 on an adjusted basis after exceptional items and amortisation linked to the Capital Foods and Organic India acquisitions.

For the first half of FY27, net profit rose 22% to Rs. 897 crore, with adjusted EPS of Rs. 9.85, up 21%.

Tata Consumer Share Price Target

Elara Capital has given an Accumulate rating on Tata Consumer Products but cut its target price to Rs. 1,080 from Rs. 1,290, a reduction of about 16%. At the Rs. 988.30 level the stock hit on Tuesday, the new target implies an upside of roughly 9%.
The brokerage in its report said, "Q2 revenue grew 14% YoY to Rs. 56.6 billion, in line with estimates, with India branded business underlying volume growth at 11%, led by a 40% YoY surge in the growth portfolio."

The biggest reason behind the target cut is the Tata Starbucks JV, whose contribution to Elara's valuation was revised down to Rs. 40 per share from Rs. 54, a drop of about 26%.

Disclaimer: The views and recommendations expressed are solely those of the individual analysts or entities and do not reflect the views of Goodreturns.in or Greynium Information Technologies Private Limited (together referred as "we"). We do not guarantee, endorse or take responsibility for the accuracy, completeness or reliability of any content, nor do we provide any investment advice or solicit the purchase or sale of securities. All information is provided for informational and educational purposes only and should be independently verified from licensed financial advisors before making any investment decisions.