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The shares of Tata Consumer Private Limited were up 2 per cent on Wednesday after the company announced its results for the quarter ended December 2020.
At 10:26 am, TCPL shares were trading at ₹591.70 on the BSE, up ₹16.15 or 2.81 per cent.
It opened at 587.00 as against the previous close of ₹575.55. It hit an intra-day high of ₹597.50 and an intra-day low of ₹571.30.
It was trading at ₹592.35 on the NSE, up ₹17.00 or 2.95 per cent.
The company’s net profit for the quarter stood at ₹237 crores, up by 29 per cent, per regulatory filings. Its revenue from operations for the quarter were ₹3,070 crore, up 23 per cent. Consolidated EBITDA for the quarter grew by 12 per cent to ₹365 crore.
Sunil D’Souza, Managing Director & CEO of Tata Consumer Products said, “We delivered strong volume and revenue growth during the quarter driven by broad based performance across our major markets and categories. Despite unprecedented inflation in our tea costs in the India business, we managed to deliver strong growth in earnings by leveraging all lines of the P&L.”
“We have completed the redesign of our S&D system with significantly higher feet on street, increased focus on modern trade and e commerce, 100 per cent channel partner automation and expanded outlet reach. We have stepped up the pace of innovation with new launches across markets and activated new engines of growth. We have also stepped up investment behind our brands to further strengthen their reach and relevance to consumers,” he said.
Separately, the company on Tuesday announced that in a bid to expand its product portfolio, it will acquire Bengaluru-based Kottaram Agro Foods for ₹155.8 crore.
Analysts see further upside in the stock of TCPL.
Buy rating
Yes Securities, seeing an upside of 8 per cent, maintained a buy rating on the stock with a target price of ₹617.
“While near-term margin headwinds remain for the tea business, sustained improvement in foods and international business margins should help offset that in addition to synergy benefits flowing in,” it said.
It further increased its FY22E/FY23E EPS by 5 per cent/8 per cent “to build in higher realizations in India businesses and better growth rates in international beverages.”
“We are building in a 12.5 per cent revenue and 22.7 per cent earnings CAGR over FY20-23E and reiterate our BUY rating with a revised SOTP-based TP of ₹617 (from ₹574), implying 48x/42x FY22/FY23E P/E,” it said.
Motilal Oswal Research also maintained a Buy rating on the stock with a target price of ₹661 and a 15 per cent upside.
“Factoring in its performance in 3QFY21, we decrease our FY21E EBITDA/adjusted PAT estimates by 6 pe r cent/2 per cent, but maintain our FY22E/FY23E earnings estimates, and arrive at an FY23E SoTP-based TP of INR661. Maintain Buy,” it said.
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