Lower tea prices to boost Tata Consumer's margins

Brokerages positive on stock amid hopes of spurt in food biz

- RAM PRASAD SAHU

Led by the India-branded business, Tata Consumer Products posted better than expected revenue during the September quarter. Margins were under pressure as gains at the India standalone operations were offset by the international and unbranded business.

Brokerages are positive on the outlook for the stock, given expectations of margin gains in the tea segment, improved product mix and growth spurt from the foods business. The stock has outperformed peers over the past year with a return of 18.4 per cent. Its peer index, the Nifty FMCG, is down 5 per cent over this period.

The company posted a revenue growth of 18 per cent Yo-Y at ₹4,966 crore aided by volume growth of 14 per cent. The India business, according to the company, posted double digit growth in both tea and salt for a second consecutive quarter.