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Wednesday, October 27, 2021

Tata Consumer Products may bring bumper profits to investors, brokerage firm raises target price with ‘Buy’ rating

Tata Consumer Products (TCPL) is trading near its all-time high. Talking about the last five months, so far its price has increased by 32 percent.

Tata Consumer Products (TCPL) is trading near its all-time high. Talking about the last five months, so far its price has increased by 32 percent. According to the company’s Annual General Meeting (AGM), Tata Consumer Products will expand into online and offline distribution to drive the next phase of growth. According to brokerage firm Edelweiss, there may be a correction in the prices of tea in the next two months, that is, its prices may fall but it is expected to remain higher than the price of two years ago. According to Edelweiss, the company’s activities have picked up under the new leadership and keeping these sub-points in mind, the brokerage firm has given a buy rating on the target price of Rs 880 for the medium to long term.

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Highlights of the company’s AGM

  • The company will strengthen its portfolio and will be aggressive about acquisitions.
  • The company made it clear in its AGM that it is focusing on health products and preparations are on to launch it soon. Tata Consumer Products is making every effort to ensure that the availability of its products does not become a problem despite the Corona epidemic and it is being tried that the company’s products are available everywhere at any time.
  • The company will evaluate all its business and exit the one which is not good for it or is non-core business.
    Starbucks’s 39 stores that were aggressively opened in the last fiscal year 2021 will continue to expand.
  • The plan of Tata Consumer Products will strengthen the e-commerce sector through the Tata Super App. The Tata group has bought a majority stake in online retailer BigBasket, which will act as leverage for Tata Consumer.
  • The company plans to have a capital expenditure of Rs 350-400 crore annually.

Increased target price on the growth potential of the company

According to brokerage firm Edelweiss, Tata is becoming a better base for consumer products. Its revenue from Kanrni’s salt and tea business will continue and its revenue will increase further from the new business of pulses and spices. The company has now focused more in core areas and has simplified its business model by exiting non-core markets and businesses, which is expected to grow long term for the company. In addition, the integration of the Food and Beverage (F&B) business has increased the direct coverage of outlets by 30 per cent, while the integration of the F&B CFA network has reduced costs for the company. Keeping all these points in mind, the brokerage firm has increased the target price for Tata Consumer Products from Rs 770 to Rs 880.

(The stock recommendations given in the story are those of the respective research analyst and brokerage firm and Financial Express Online does not take any responsibility for this investment advice. Investing in capital markets is subject to risks and please consult your advisor before investing. )

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Nisha Chawlahttps://www.businesskhabar.com/
She is an expert in Banking, Finance and working with an international bank. She sharing her ideas and knowledge with Business Khabar.
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