Sharekhan is bullish on Tata Consumer Products has recommended buy rating on the stock with a target price of Rs 960 in its research report dated August 31, 2021.
Broker Research
September 01, 2021 / 01:14 PM IST
“India’s specialty chemicals industry is a decadal growth opportunity and it is still not too late to participate in the value creation process. We prefer CRAMS/CSM players Navin Fluorine (Navin) and PI Industries (PI) as they provide long-term earnings visibility. We also like UPL due to robust growth outlook and reducing debt concerns and SRF due to rising contribution from the chemicals business,” JM Financial research report.
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Sharekhan’s research report on Tata Consumer Products
TCPL is progressing well on strategic priorities of increasing the direct coverage (targets 1mn outlets by Sept, 21), adding innovation on various platforms/markets (targets 3.5% of sales in FY22), and embed digitalisation across the value chain. Domestic raw tea prices are stabilising and declined by ~35% from their high in August-September 2020. Stable raw-material prices, price hikes in the beverages portfolio, and synergistic benefits from acquired companies would help in better margins from Q3. Steady volume growth in the foods and beverages business and margin expansion would enable TCPL to report revenue and PAT CAGR of 13% and 19%, respectively, over FY2021-FY2024.
Outlook
We maintain Buy on Tata Consumer Products Limited (TCPL) with a revised PT of Rs. 960. With strong growth prospects and sturdy cash flows (FCF/EBIDTA of 100%), TCPL is one of our top picks in the FMCG space.
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