CLSA upgrades these five consumer stocks on attractive valuations; Check latest price targets

Shares of Tata Consumer Products, Nestle India, Jubilant Foodworks, and Swiggy, were upgraded by brokerage firm CLSA in its latest note on Tuesday, April 7, citing attractive valuations.

The brokerage said the consumer stocks have witnessed significant  changes in the fourth quarter on input costs compared to the previous quarter, offsetting the potential benefits of the GST rate cuts announced last year.

Historically, such sharp input cost increase is beneficial to leaders in the sector, CLSA wrote in its note.

As a result, CLSA has upgraded its rating on Tata Consumer Products to "outperform" from its earlier rating of "hold". It has also raised its price target to ₹1,193 from ₹1,166 earlier. The revised price target implies an upside potential of 14% from current levels.

Additionally, it has also upgraded its rating on Jubilant Foodworks, which is down as much as 7% after its March quarter business update, to "outperform" from its earlier rating of "hold", and raised its price target to ₹520 from ₹505 earlier. The revised price target also implies an upside potential of 13% from current levels.

The recommendation on Swiggy has been upgraded to "outperform" from "hold" earlier and its price target has been raised higher to ₹357 from ₹335 earlier. The revised price target is still below the company's IPO price of ₹390, but implies an upside potential of 32% from current levels.

It also upgraded its rating on AB Fashionto 'hold' from 'underperform', citing a more balanced risk-reward. However, it has cut its price target on the stock to ₹55 from ₹60 earlier.

Within the FMCG basket, CLSA said that it has a preference for food, over other household and personal care items. It sees the recent corrections in a few stocks as an opportunity to "buy".

On another note

, brokerage firm Elara Securities has maintained its 'buy' rating on Jubilant Food with a price target of ₹780 apiece, supported by easing competitive intensity in the pizza segment, potential margin levers and higher delivery exposure that is aligned with the evolving consumer preferences.

Its fourth quarter consolidated revenue from operations increased 19.1% from the previous year. Its same store sales growth remained muted in India. The weakness was largely due to the ongoing commercial LPG supply constraints, given that more than 95% of the firm's outlets are dependent on LPG.

Shares of Tata Consumer are trading 0.6% lower at ₹1,048.3. Shares of Aditya Birla Fashion are trading little changed at ₹58.84.

Also Read: BoFA downgrades these two PSU Banks on asset quality risks; SBI upgraded