Brokerage firms post mixed sentiment for Tata Consumer after Q4 result – check target price here

A day after its quarter-four results, brokerages Nomura and Morgan Stanley have maintained Buy and Underweight stances on Tata Consumer Products respectively. The company has reported a good earnings report card but missed the street’s expectations as margins were weak. 

Tata Consumer Products on Thursday reported a consolidated net profit of Rs 133.34 crore for the March-ended quarter as compared to a loss of Rs 50 crore in the year-ago period. The company's board has recommended a final dividend of Rs 4.05 per equity for the financial year 2020-21. 

Nomura expects Tata Consumer to drive superior volume growth and gain share from unorganised segments going ahead. The brokerage firm said despite a weak demand environment, it took sharp price increases. Nomura sees higher advertising spending as positive, especially in an inflationary input cost environment. It maintains a Buy stance and sets a target of Rs 750 per share. 

Tata Consumer earnings miss Morgan Stanley’s expectations, and due to which the brokerage maintains an Underweight rating on the stock. The brokerage firm says, headwinds from tea inflation in the domestic beverage business, it downgrades a target of Rs 494 per share 

Tata Consumers declined by around 4 per cent to end at Rs 629 per share, as compared to Rs 653 per share on Thursday’s close. It touched a day’s high at Rs 642 per share intraday today. 

Tata Consumer’s revenue from operations rose 26.2 per cent to Rs 3,037 crore from Rs 2,405 crore reported in the same quarter last year. The company said it has an exceptional item for the current quarter mainly representing costs relating to the business restructure and reorganisation of Rs 18 crore and loss on disposal of an overseas subsidiary of Rs 46 crore. 

Tata Consumer Products Managing Director and Chief Executive Officer Sunil D’Souza in a management commentary said, “We delivered yet another Quarter of strong revenue growth, driven by double-digit volume growth in India business. The integration of our food and beverage businesses in India is complete as committed and we have started seeing synergy benefits."