Fundamentals strong; Valuation reset improves risk-reward – upgrade to Buy

研报英文原文证据摘录

Fundamentals strong; Valuation reset improves risk-reward – upgrade to Buy

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Tata Consumer Products

Fundamentals strong; Valuation reset

improves risk-reward – upgrade to Buy

Rating Change: BUY | PO: 1,270 INR | Price: 1,088 INR

Healthy growth outlook; stock pullback - an opportunity 27 July 2026

We forecast a healthy 17% earnings CAGR for Tata Consumer over next 2-3 years, driven Equity

by a sizeable ‘Growth’ portfolio and stable core India tea/salt businesses. Even as we

trim earnings by 3-4% factoring 1QFY27 results and commodity trends, we think risk-

Key Changesreward has become positive. The stock is down ~14% from peak and trades below its

historical valuation range, both in absolute and relative terms. The stock price has also (Rs) Previous Current

been range-bound since Capital Foods & Organic India acquisitions. Upgrade TATACONS Inv. Opinion B-2-7 B-1-7

to Buy (from Neutral). New SoTP-based PO is Rs1,270 (vs Rs1,240); implies multiple of Inv. Rating NEUTRAL BUY

50x Sept-28E adj. EPS (51x Mar-28E earlier). ~80% of our fair value comes from India, Price Obj. 1,240 1,270

where non-tea/non-salt portfolio is now >30% (and growing >30% CAGR). We estimate 2027E Rev (m) 228,267 223,428

modest margin gains to sustain aided by rising scale and pricing/mix/cost control. Non- 2028E Rev (m) 249,367 243,442

India businesses have been more volatile, though INR depreciation aids reported growth. 2029E Rev (m) 280,659 269,165

Downside risks: significant tea inflation and weak traction for new launches. 2027E EPS 19.6 18.8

2028E EPS 22.5 21.7

Self-help initiatives gaining traction 2029E EPS 26.3 25.6

Business fundamentals are strengthening, driven by multiple self-help initiatives

including: i) Portfolio innovation – 80/14 products launched in FY26/1QFY27.