ICICI Direct Assigns Buy On Large Cap Tata Group Stock, Sees Upto 32% Gains, 845% Dividend Income

ICICI Direct has come up with a Buy recommendation on Tata Consumer Products Ltd. (TCPL) for gains of 32% with a target price of Rs 980 apiece. TCPL on Tuesday, April 25, 2023, recommended a final dividend of Rs 8.45/share for the FY 2022-23.

It is a flagship company of Tata Group operating in the FMCG sector. It is a large-cap company having a market capitalisation of Rs 69,369.30 crore.

Stock Overview

On Wednesday, the closed 1.67% high at Rs 746.70 apiece. Its 52-week high is Rs 861.15 apiece and 52 week low is Rs 686.60 apiece. It surged 6.65% in 1 week, and 6.31% in 1 month, respectively. The stock declined 9.17% in 1 year. In 3 years it jumped 128.98% and in 5 years 156.42%, respectively.

Recommendation of Final Dividend for FY 2022-23

"The Board has recommended a final dividend of Rs. 8.45/- per equity share of Re. 1 each (845%), for the financial year 2022-23. The Dividend, if approved by the members at the ensuing Annual General Meeting, will be paid/dispatched (subject to deduction of tax at source) after the AGM and within 30 days of its declaration," the company said in an exchange filing on April 25, 2023.

Q4FY23 Results

According to brokerage, TCPL reported 14% revenue growth led by the India business

• Constant currency sales growth of 12% was driven by 6% volume growth
• EBITDA was at Rs 511.7 crore, up 15.2% YoY, with margins at 14.1%
• Consequent adjusted PAT was at Rs 289.5 crore (up 21.1% YoY)

Buy for a target price of Rs 980/share

According to ICICI Direct, TCPL's share price has given moved up 155% in the last five years (from Rs. 292 in April 2018 to Rs. 744 in April 2023). TCPL to drive volumes through new product portfolio, which includes NourishCo, Soulful, Sampaan & Smartfoodz. Premiumisation trend in tea & salt to aid margins. "We maintain our BUY rating on the stock. We value the stock at Rs 980 on ascribing 52x FY25 earnings multiple," the brokerage has said.

About - Tata Consumer Products (TCPL)

Tata Consumer Products (TCPL) is one of the major FMCG companies present in tea, coffee & other beverages in India, UK, US, Canada and some other geographies. In India, it also has salt, pulses, spices & other foods products. Its subsidiary NourishCo is present in packaged water & other beverages. The company is in JV with Starbucks, which has 333 stores in India. The company has 2000+ distribution directly reaching to 1.5 million outlets in India. Its total distribution reach is 3.8 million outlets.

Disclaimer - The stock has been picked from the brokerage report of ICICI Direct. Greynium Information Technologies, the Author, and the respective Brokerage house are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to consult with certified experts before making any investment decision.