Tata Consumer Products Share Price Target at Rs 1,067: Geojit Financial Services
Tata Consumer Products Ltd (TCPL), a key subsidiary of the Tata Group, has reported a strong financial performance in Q3FY25, driven by its robust presence in the food and beverages sector both domestically and internationally. With a 16.8% year-on-year revenue growth, the company continues to expand its market share, leveraging its premium brands and strategic acquisitions. However, EBITDA margins contracted due to pressure on tea margins, despite solid growth in its salt and value-added product segments. Given the long-term potential, Geojit Financial Services has issued a "BUY" rating with a target price of Rs. 1,067, reflecting an 11% upside from its current market price.
Financial Performance: Revenue Growth Despite Margin Pressure
According to Geojit Financial Services, TCPL reported strong revenue growth in Q3FY25, primarily driven by its India business, which saw a 19.3% YoY increase, reaching Rs. 2,834 crore. The growth was largely fueled by:
Robust demand for domestic tea, supported by double-digit volume expansion.
Sustained growth in the salt business, a core product category.
Expanding presence of Tata Sampann, recording 10% organic growth in India.
The international business also performed well, growing 16% YoY to Rs. 1,192 crore, driven by high commodity prices and strategic market interventions in key regions like the UK and Canada.
However, EBITDA declined by 1.3% YoY, falling to Rs. 565 crore, while EBITDA margins contracted by 230 basis points to 12.7%, mainly due to cost pressures in the tea segment.
Stock Valuation and Target Price
Current Market Price (CMP): Rs. 960
Target Price: Rs. 1,067 (Upgraded from HOLD to BUY by Geojit Financial Services)
Potential Upside: +11%
P/E Ratio: 69.7x (FY25E), 53.8x (FY26E), 43.9x (FY27E)
Dividend Yield: 0.8%
Market Cap: Rs. 94,398 crore
Given its strong market position, premium brand portfolio, and expansion into newer categories, the company is expected to sustain long-term growth. The valuation at 49x FY27E adjusted EPS suggests continued upside potential for investors.
Technical Analysis: Support, Resistance, and Fibonacci Levels
Tata Consumer Products Ltd. is currently trading at Rs. 960, within a 52-week range of Rs. 1,250 to Rs. 884. Below is a breakdown of key support and resistance levels, along with Fibonacci retracement insights:
Support and Resistance Levels
| Level | Price (Rs.) |
|---|---|
| Immediate Support | Rs. 920 |
| Major Support | Rs. 884 (52-week low) |
| Immediate Resistance | Rs. 1,000 |
| Major Resistance | Rs. 1,067 (Target Price) |
The stock faces immediate resistance at Rs. 1,000, a psychological barrier. If it breaches this level, Rs. 1,067 remains the next major target.
Fibonacci Retracement Levels
| Retracement Level | Price (Rs.) |
|---|---|
| 0% (Recent Low) | Rs. 884 |
| 23.6% | Rs. 927 |
| 38.2% | Rs. 960 (CMP) |
| 50% | Rs. 1,020 |
| 61.8% | Rs. 1,067 |
| 100% (Recent High) | Rs. 1,250 |
The stock is currently trading around the 38.2% retracement level at Rs. 960, indicating potential upside towards Rs. 1,067 (61.8% Fibonacci level) if the momentum sustains.
Growth Drivers: Expansion into New Categories
Tata Consumer Products has been actively expanding its product portfolio, with a focus on premiumization and new categories:
New domestic product launches:
Tata Tea Premium Care
Tetley Instant Green Tea Ready Mix
Monsoon Malabar Coffee
Tata Starbucks Expansion:
16 new stores opened in Q3FY25.
A total of 473 stores across 74 cities.
Expansion into East India markets like Patna, Ranchi, Jamshedpur, Bilaspur, and Gangtok.
The Ready-to-Drink (RTD) segment saw 14% YoY volume growth, though revenue declined due to pricing recalibration.
Investment Outlook: Why TCPL Remains a Strong Bet
Despite short-term EBITDA margin pressures, Tata Consumer Products remains well-positioned for long-term growth, given its:
Diverse product portfolio across tea, coffee, salt, and packaged foods.
Strong brand loyalty through Tata Tea, Tetley, Tata Salt, and Tata Sampann.
Expansion into new distribution channels, including pharma and food services.
Rising contribution from premium and organic segments.
The stock has corrected 24.1% in the last year, presenting an attractive long-term buying opportunity for investors.
Conclusion: Buy with a Target of Rs. 1,067
Tata Consumer Products continues to outperform in its India business, benefiting from strong demand in tea, salt, and value-added segments. While margins were impacted, the company's long-term growth strategy remains intact, backed by new product innovations, global market expansion, and premiumization efforts.
With an upgraded BUY rating by Geojit Financial Services and a target price of Rs. 1,067, the stock presents a 11% upside potential for long-term investors.
