Tata Consumer Surges 8% as Goldman Sachs Boosts Rating & Target

Tata Consumer Products saw a sharp rise in its stock price during early trading on Wednesday after global brokerage firm Goldman Sachs upgraded its rating and increased its price target.

Shares surged by 8.15%, reaching an intraday high of Rs 1,073.15 on the NSE. However, the stock later trimmed some gains and was trading at Rs 1,063.40, marking a 7.17% increase.

Goldman Sachs’ Positive Outlook

Goldman Sachs revised its rating on Tata Consumer Products from ‘Neutral’ to ‘Buy’ and increased the target price to Rs 1,200 from the previous Rs 1,040.

The brokerage firm expects robust Earnings Per Share (EPS) growth for Tata Consumer Products over financial years 2025-2027. Additionally, it anticipates a recovery in tea margins driven by price hikes.

Goldman Sachs highlighted the company’s efforts in innovation and expanding distribution within its growth businesses.

Quarterly Performance and Market Impact

Despite a 6% decline in group profit to Rs 282 crore—attributed to inflation in the tea segment and high interest costs—Tata Consumer Products showed strong revenue growth.

The company posted a 17% year-on-year (YoY) increase in revenue, reaching Rs 4,444 crore for the quarter ending December 31. This growth was largely fueled by its India beverages and foods business, which contributes nearly 70% of the company’s revenue.

Following the upgrade from Goldman Sachs, the stock experienced an 8% gain on April 2. The new price target implies a potential 21% upside from the previous closing price of Rs 992.4 per share.

Analyst Ratings and Market Position

Of the 30 analysts covering Tata Consumer Products, 25 have assigned a ‘Buy’ rating, four have a ‘Hold’ rating, and one has issued a ‘Sell’ rating.

The stock has risen 12.9% year-to-date, reaching an intraday high of Rs 1,073.55 on April 2, 2025. Around 10 AM, it was trading at Rs 1,046.85 per share on the NSE, while the NSE Nifty index was up by 0.33% at 23,242.5.

The company’s market capitalization stands at Rs 1,03,585.19 crore. The stock’s 52-week high and low are Rs 1,250.1 and Rs 882.9 per share, respectively.

Comparative Brokerage Ratings

Goldman Sachs’ positive outlook aligns with that of Nomura, which also maintained a ‘Buy’ rating with a target of Rs 1,250 per share.

However, CLSA held a more cautious stance, maintaining a ‘Hold’ rating and reducing its target price from Rs 1,049 to Rs 992 per share.

Financial Performance Overview

For the third quarter ending December 31, 2024, Tata Consumer Products reported a consolidated net profit of Rs 279 crore, marginally higher than Rs 278.87 crore in the previous year.

Revenue for the quarter stood at Rs 4,443.56 crore, up from Rs 3,803.92 crore YoY.

Despite the growth, the company faced challenges due to rising domestic tea costs. Tea contributes nearly 60% to overall revenue, and the price surge significantly impacted profitability.

The Indian segment, which includes packaged products like pulses and spices and accounts for 56% of the company’s profit, saw a 43% decline in profit due to increased tea prices.

Stock Movement and Industry Standing

Tata Consumer Products’ stock remained strong, trading 7.47% higher at Rs 1,066 on the Bombay Stock Exchange (BSE) at 11:34 AM after reaching an intraday high of Rs 1,073.55.

Goldman Sachs’ latest assessment reaffirmed the company’s potential, citing strong innovation, distribution expansion, and a reduction in net interest costs as key strengths.

While competition remains a concern, the brokerage believes the worst phase is over for the stock.

Growth Strategies and Market Trends

Tata Consumer Products continues to strengthen its presence in the FMCG sector, offering products across multiple categories such as tea, coffee, water, salt, pulses, spices, snacks, and ready-to-eat foods.

The company remains committed to expanding its brand presence through innovation and distribution growth.

Meanwhile, broader stock market indices performed positively. Despite uncertainties related to Donald Trump’s ‘Liberation Day’ tariff announcement, the Sensex gained over 400 points, and the Nifty50 index traded above 23,200.