KR Choksey Bullish On Tata Consumer Products, Buy For A Target Price Of Rs 964

KR Choksey remains upbeat about the Tata Group stock Tata Consumer Products Ltd and said if investors buy the stock now at the current market price of Rs 788 apiece, it can fetch a return of 22%.

Tata Consumer Products Ltd Stock Outlook

The current market price of the stock is Rs 788 apiece. Currently, the stock is trading at a discount of 13% from its highs. If you buy the stock at Rs 788 apiece, it can surge to Rs 964 apiece with a potential gain of 22%.

Multibagger Returns

The stock has given multibagger returns. In the last 5 years, it has given return of 308%, in last 3 years it has given 195% return, and in the last 1 year the stock has fallen 5%.

Tata Consumer Products Ltd Q1FY23 Result

For Q1FY23, TATACONS reported revenue of INR 33,268 Mn, which is a growth of 10.6% YoY and 4.8% QoQ. The India Packaged Beverages business revenue declined by 4.0% YoY on a high base, while volumes increased by 1.0% YoY. The India Foods business revenue grew by 19.0% YoY, on an elevated base, while volumes declined by 3.0% YoY. The International Beverages revenue growth was 9.0% YoY. Tata Starbucks saw a revenue growth of 238.0% YoY, on a low base.

Tata Consumer Products Ltd EBITDA and PAT

EBITDA for the quarter was INR 4,573 Mn, which grew by 14.5% YoY and 2.9% QoQ. EBITDA margin of 13.7% for the quarter was an improvement of 47 bps YoY, though it contracted by 25 bps QoQ. Adjusted PAT was INR 2,794 Mn, which is a growth of 47.8% YoY and 18.3% QoQ. Adj PAT margin was at 8.4%, which grew by 211 bps YoY and 96 bps QoQ.

Tata Consumer Products Ltd Market Capitalization

The stock has a market capitalization of Rs 72,622.88 crore.

Tata Consumer Products Valuation

According to KR Choksey, " We have valued TATACONS on a SOTP basis. For India Business, we apply an EV/EBITDA multiple of 40x to FY24E EBITDA; for International Business, we apply an EV/EBITDA multiple of 17x to FY24E EBITDA; and for Starbucks business, we apply an EV/Revenue multiple of 3x to FY24E Revenue. Accordingly, we maintain our target price of INR 964 per share (unchanged), an upside of 24.6% over the CMP. Accordingly, we reiterate a "BUY" rating on the shares of Tata Consumer Products Ltd."

Tata Consumer Products Ltd About

The merger of the consumer products business of Tata Chemicals with Tata Global Beverages Limited (TGBL) was aimed at spearheading our ambition to become a leading FMCG player.

Today TGBL, renamed to Tata Consumer Products, is home to several brands such as Tata Tea, Tetley, Tata Salt, Eight O'Clock Coffee, Himalayan Water and emerging brands like Tata Sampann, Tata Soulfull, Tata Gluco Plus and Tata Water Plus. The brands are present in over 40 countries with a diverse workforce spread across the world, according to its official website.

Disclaimer

The stock has been picked from the brokerage report of KR Choksey Research. 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 check with certified experts before taking any investment decision.