Tata Consumer Products shares jump 8% after Goldman Sachs upgrade

Sandip Raj Gupta

    02/Apr/2025

  • Tata Consumer shares surged 8% after Goldman Sachs upgraded its rating to 'BUY'.

  • The brokerage raised the stock’s price target to ₹1,200, citing strong future growth.

  • Tata Consumer expects a recovery in tea margins and expansion in key business segments.

Tata Consumer Products Ltd. saw an impressive 8% surge in its stock price on Wednesday, following a rating upgrade by Goldman Sachs. The global brokerage upgraded the stock to 'BUY' from its earlier 'Neutral' stance and revised its target price to ₹1,200 per share, up from the previous ₹1,040.

During early trade, Tata Consumer's stock hit an intraday high of ₹1,073.15 on the NSE, reflecting an 8.15% jump. However, it later trimmed some gains and was last trading at ₹1,063.40, up 7.17% for the day.

Goldman Sachs’ Optimism on Tata Consumer’s Growth

Goldman Sachs expressed confidence in Tata Consumer’s earnings growth potential, forecasting a robust increase in Earnings Per Share (EPS) over financial years 2025-2027. The brokerage highlighted several key growth drivers for the company, including:

  • Recovery in tea margins, aided by price hikes

  • Expansion in key business segments, including beverages and packaged foods

  • Increased innovation and stronger distribution networks in growth categories

Financial Performance: Mixed Earnings with Strong Revenue Growth

Despite the stock’s rally, Tata Consumer Products recently reported a 6% decline in group net profit to ₹282 crore due to inflation in the tea segment and higher interest costs. Sequentially, profits fell 23% from ₹367.2 crore recorded in the previous quarter.

However, the company posted a strong 17% year-on-year revenue growth, reaching ₹4,444 crore for the quarter ending December 31. The revenue boost was mainly driven by growth in its India beverages and foods business, which contributes nearly 70% to its overall revenue.

Tea Margin Recovery and Expansion in Growth Businesses

One of the key reasons behind Goldman Sachs' optimistic outlook is the expected recovery in tea margins for Tata Consumer. The brokerage believes that price hikes will help offset inflationary pressures, leading to improved profitability in the segment.

Additionally, Tata Consumer is focusing on innovation and expansion in its beverages and packaged foods divisions, which have shown consistent growth in recent quarters.

Investor Outlook: What’s Next for Tata Consumer Shares?

With Goldman Sachs setting a higher price target of ₹1,200 per share, investors are closely watching Tata Consumer’s performance in the upcoming quarters. Analysts believe that steady revenue growth, cost control measures, and expansion in key markets will play a crucial role in determining the stock's future trajectory.

The stock's rally today reflects renewed investor confidence in Tata Consumer’s long-term growth potential. However, factors such as input cost inflation, interest rate trends, and consumer demand shifts will continue to influence market sentiment.

For investors looking at FMCG stocks, Tata Consumer remains an attractive bet, especially with its strong market presence, premium product portfolio, and aggressive expansion plans.


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