Shares of FMCG major Tata Consumer Products nosedived as much as 5.21% to their day’s low of Rs 1,126 on the BSE on Wednesday despite the company reporting a 38% year-on-year (YoY) jump in consolidated net profit for the December quarter at Rs 385 crore, compared with Rs 279 crore in the year-ago period.
Revenue from operations rose 15% to Rs 5,112 crore in Q3, from Rs 4,444 crore in the corresponding quarter of the previous financial year.
The PAT fell 4% sequentially from Rs 404 crore in Q2FY26, while the topline was 3% higher quarter-on-quarter (QoQ) at Rs 5,112 crore, compared with Rs 4,966 crore in the July-September quarter.
The double-digit revenue growth was driven by strong volumes, with the India Branded business reporting underlying volume growth of 15%, the company filing said.Should you buy, sell or hold?
Morgan Stanley has maintained an Overweight rating on Tata Consumer Products with a target price of Rs 1,265. This implies an upside potential of 6.5% from current market levels. The brokerage highlighted a strong performance in the foods segment, led by salt and Sampann, while tea delivered a steady showing. Growth businesses expanded 29% YoY, accelerating from 27% in Q2, with combined quarterly revenues crossing Rs 10 bn, accounting for around 30% of the India business.
The India branded portfolio reported double-digit volume growth, supported by a sharp improvement in margins. Margin expansion was driven primarily by better India branded margins, aided by lower tea input costs. On market share, tea saw a 70 bps YoY decline, while salt market share improved by 40 bps YoY, reflecting strength in the core foods portfolio.
Motilal Oswal has reiterated its Buy rating on the stock with a target price of Rs 1,450, an upside of 22% from current market levels. It expects growth in Tata Consumer Products to be driven by effective go-to-market execution, enabling faster expansion of high-growth categories. This, along with portfolio premiumisation, a higher innovation-to-sales ratio and improving operating leverage, is expected to support sustainable revenue growth and gradually enhance profitability over the medium term. The brokerage forecasts a CAGR of 10% in revenue, 13% in EBITDA and 19% in PAT over FY25–28.
JM Financial has maintained an Add rating, while revising the target price to Rs 1,285 from Rs 1,265. It said Tata Consumer Products’ Q3FY26 earnings were marginally ahead of estimates, with a 1–2% beat in revenue and EBITDA, driven by better-than-expected performance in India Foods—led by the salt and Sampann portfolio—and strong growth in the non-branded business, which rose 23% YoY. Key positives included robust traction in growth businesses at 29% YoY (excluding Capital Foods, which grew 10% YoY), solid growth in salt at 14% YoY, and an 18% YoY increase in the international business.
The revenue outlook remains unchanged, with management guiding mid-to-high single-digit growth in tea and salt and around 30% growth in growth businesses, which should support sustained double-digit sales growth. JM Financial remains positive on execution across core and growth segments and has built in a 10.5% sales CAGR, 160 bps margin expansion, and 22% earnings CAGR over FY26–28E.
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