Tata Group stock surges the most in six years after strong Q4 results, future outlook

Shares of Tata Consumer Products Ltd. gained 8% on Monday, May 11, reacbting to their fourth quarter earnings. This is the biggest single-day gain for the stock since March 2020.

The stock surged after brokerages such Goldman Sachs and CLSA are positive on the stock and see up to a 23.2% upside on it.

Goldman Sachs

The brokerage has a "buy" rating on the stock with a price target of ₹1,450 per share.

It said the company's fourth quarter beat revenue growth and margin estimates.

Its India volumes growth was at 16%, which continues to be the highest among Indian FMCG peers, and is likely to sustain, Goldman Sachs said.

The growth segments crossed 30% of revenues, while growing over 30%, it said.

CLSA

CLSA has an "outperform" rating on the stock with a price target of ₹1,337 per share.

It said the fourth quarter sales growth of 18% was 3% ahead of estimates.

The salt segment witnessed 13% volume growth from the previous year, while Sampann accelerated 69%.

CLSA said quick commerce and e-commerce, which make up 21% of the company's India business, grew 62% in FY26 and remain a key growth driver, especially for growth brands.

The brokerage said the company's EBITDA grew 28%, which was up 1% ahead of estimate.

'Inflation due to West Asia war not a worry at the moment'

The Tata Consumer Products management told CNBC-TV18

that the company got 220 basis points benefits from cost leverage. It said the company will grow EBITDA over revenue. It added that growth businesses would continue to grow at 30%. Capital foods, organics and Sampann segments would continue to grow at 30%, the company said, while innovation to sales will continue at 5%.

The company is also looking at 25-30% growth in new channels such as vending machines and pharma.

It said it has tackled the supply side issues and raw material inflation. The company added that it is not worried about inflation due to the West Asia crisis at the moment.

The management also expressed that it was confident of mid-high single digits in the international business with margin expansion.

Stock reaction

Of the 31 analysts who have coverage on the stock, 23 have a "buy" rating, six have a "hold" rating, while two have "sell" rating.

Shares of Tata Consumer Products gained 7.5% to hit an intraday high of ₹1,265 apiece on Monday. The stock has risen 16% in the past month.

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