Tata Consumer Products Share Price Target : Tata Consumer Products Limited (TCPL) is an Indian consumer goods company with a strong portfolio of brands including Tata Tea, Tetley, Tata Salt and more. This article provides a comprehensive overview of TCPL, analyzing its operations, fundamentals, growth drivers, risks, share price targets for 2023 to 2030 and overall investment potential for retail investors.
Table of Contents
Tata Consumer Products – Company Overview
Tata Consumer Products Limited (TCPL) was established in 1962 and is headquartered in Mumbai. Key facts about the company:
- Offers a range of products including tea, coffee, water, salt, pulses, and other foods.
- Major brands are Tata Tea, Tetley, Tata Coffee Grand, Himalayan, Tata Salt, Tata Sampann etc.
- Products are available in over 40 countries with operations across the world.
- Among the top ten players in India, Canada, USA and UK.
- Also exports tea to Europe, the Middle East, Australia and other regions.
- Around 22% of FY22 revenues came from international markets.
- Committed to sustainable production through renewable energy and water conservation.
Overall, Tata Consumer Products or TCPL has built strong brands and has an extensive global distribution network spanning developed and emerging markets.
Fundamental Analysis of Tata Consumer Products
Here is a quick look at the key fundamentals of Tata Consumer Products:
Market Capitalization: ₹81,739 Crore
Current Share Price: ₹880 (Feb 2023)
52 Week High/Low: ₹910/₹685
P/E Ratio: 71.3 times
Book Value Per Share: ₹175
Dividend Yield: 0.96%
ROCE: 9.32%
ROE: 6.86%
Some positives from the fundamentals analysis:
- Market leadership in Tea and Salt with over 50-60% market share.
- Strong cash flows and balance sheet – the company is net debt free.
- Improving return ratios over the years.
- International revenues provide diversification and growth opportunities.
However, the valuation multiples look quite high currently. The P/E ratio of over 70 times earnings indicates that strong profit growth is expected in the future.
Tata Consumer Products Share Price Target 2023
TCPL has set a growth guidance of high single to low double-digit revenue growth for FY2024. With new product launches and continued distribution expansion, the share price target for Dec 2023 is ₹900.
Key growth drivers:
- Launch of new products across categories
- Entry into new emerging markets like Africa, Turkey, Saudi Arabia etc.
- Leverage parent Tata brand’s strength for market penetration
- Strategic acquisitions of brands operating in TCPL’s core categories
If growth momentum continues, TCPL may test ₹960 levels by end of 2023. However, global macroeconomic issues like inflation and currency fluctuations may play spoilsport.
Tata Consumer Share Price Target for 2024
As part of its Vision 2025, Tata Consumer Products aims to move into the top 3 FMCG companies in India. It is focusing on the following strategic initiatives:
Expand Distribution Reach: Accelerating distribution expansion in rural areas and traditional trade channels to improve availability.
Drive Premiumization: Launching more premium products to tap changing consumer preferences. For example, Sonnets luxury offering in Coffee.
Cost Optimization: Reduction in operational costs and elimination of low-value SKUs to boost profitability.
Increase Market Share Across Categories: Higher penetration in packaged Salt, Spices, and Foods portfolio through new product variants.
With a strengthened product portfolio and a widening distribution network, TCPL’s share price may reach ₹1,100 by 2024-end. The next target if growth sustains can be ₹1,150.
Tata Consumer Products Share Price Target 2025
Over 2022-23, TCPL has accelerated distribution expansion across rural areas through hub-and-spoke models. It has also added 15-17% more retail outlets over last year taking its total coverage to over 2.6 million outlets.
It is also working actively on merger and acquisition opportunities for strategic buyouts.
With improving distribution and the possibility of brand/company acquisitions –
The Tata Consumer share price target for December 2025 is ₹1,300 providing a potential upside of over 45% from current levels.
If the inorganic and organic growth plan stays on track, the next price milestone can be ₹1,400. However, investors should be prepared for short-term price volatility due to market conditions.
Tata Consumer Share Price Target for 2026
Tata Consumer Products has ramped up its export business growth guidance from low double digits to mid-teen growth levels in the coming years.
It is expanding its international presence through:
- Launch of Sampann range of pulses and spices in the USA
- Expanding salt distribution network in Europe and Saudi Arabia
- Higher penetrations and activation efforts in key markets like the UK, Canada, Australia etc.
- Exploring new export markets in Turkey, Africa, Sri Lanka, Myanmar etc.
As the overseas business will achieve better economies of scale –
The share price target for Tata Consumer stands at ₹1,600 for December 2026, indicating a potential 80% upside over 3 years.
The next milestone if global expansion sustains can be ₹1,800 per share. However, geopolitical events and currency rate fluctuations remain key risks to monitor.
Tata Consumer Share Price Target 2030
Over 2022-25, Tata Consumer Products aims to accelerate growth through continued distribution expansion, inorganic growth opportunities and stock-keeping unit (SKU) optimization.
Post 2025, it intends to shift focus towards profitable and sustainable growth for next-level value creation.
Tata Consumer’s share price target for December 2030 stands at ₹3,500 based on –
- Strong parentage and globally trusted brands
- Strengthening foothold in India and Overseas
- Innovation and premiumisation across product categories
- Possibility of global brand associations and acquisitions
- Leveraging digitization and analytics
- Commitment to ESG framework
However, investors should assess the positive outcomes of the long-term strategy and associated risks before investment decisions.
Future Growth Potential and Prospects
Tata Consumer Products operates in the fast-growing FMCG sector and is poised for good growth in the coming years. Some factors driving its future potential:
Strong Parentage and Brand Equity: Tata brand commands high trust and recall which allows faster customer acquisition.
Distribution Network Expansion: Increasing direct reach in untapped rural markets and traditional outlets.
New Product Pipeline: Focused innovation and R&D investments for new product development.
Global Footprint: Emerging markets provide a great avenue for distribution and portfolio expansion.
TCPL also aims to identify possible Merger & Acquisition opportunities to acquire promising FMCG brands in domestic and overseas markets.
Alongside the growth levers, TCPL has taken definitive steps towards minimizing plastic usage, reducing carbon footprint, water usage efficiency and other ESG initiatives.
Thus the long-term outlook seems promising for Tata Consumer Products across both Indian and international markets.
Key Risk Factors to Consider
While TCP L’s growth outlook seems positive, investors should also assess these risk factors:
Macroeconomic Uncertainty: Currency rate fluctuations and inflationary pressures may impact profitability. A recessionary environment can affect consumer spending.
Higher Input Costs: Key raw materials like packaging, palm oil, tea, coffee etc. are seeing inflationary pressures which can squeeze margins if not passed to consumers.
Intense Competition: Battling companies like HUL, ITC, Nestle etc. with larger scale and resources may pose market share challenges in some categories.
While the company is mitigating risks through pricing actions, cost control and prudent hedging – short-term blips on account of these factors cannot be ruled out.
Tata Consumer’s Product Portfolio
Tata Consumer Products has a diversified product portfolio across hot beverages, foods, water and salt which are highlighted below:
Hot Beverages
- Tata Tea, Tetley: Leading tea brands portfolio including green tea, herbal tea, black tea, iced tea, fruit & infusion tea etc.
- Tata Coffee Grand, Eight O’Clock Coffee: Popular coffee brands available as filter coffee powder, instant coffee and single-serve formats.
- Sonnets, Tea Bags from Tata: Premium luxury tea and coffee range.
- Starbucks: Array of signature espresso beverages sold across India under a JV agreement.
Health & Wellness Portfolio
- Himalayan Natural Mineral Water: One of the most trusted water brands in India.
- Tata Gluco Plus: Range of healthy drinks like Herbal Tea, Elaichi Tea, Saffron Kashmiri Kahwa etc.
Staples & Food Products
- Tata Salt: Leader in branded iodized salt segment with ~60% market share in India
- Tata Sampann: Range of food products like pulses, spices, and ready-to-cook mixes.
- Tata Soulfull: Magnified snacks and breakfast cereals like millet muesli, ragi flakes etc.
Shareholding Pattern
The shareholding mix of Tata Consumer Products as on Dec 2022 is:
Promoter Holding: 34.41% – Tata Sons and Tata Investment Corp
Foreign Portfolio Investors: 25.01%
Banks/MFs: 5.71%
Public and Others: 35%
TCPL shares seem to have a decent public float and FPI interest. Promoter holding is stable leading to low corporate governance risks in the near term.
Latest Financial Results and Analysis
Q3 FY2023 Consolidated Results
- Revenues up 3% YoY to ₹3,363 Crore
- PBT rises 25% YoY to ₹710 Crore
- PAT is higher by 36% YoY at ₹532 Crore
- India’s food & beverages business continues strong momentum with 18% revenue growth
9M FY2023 Performance
- Consolidated Revenue at ₹9,997 Crore, +11% YoY
- Consolidated PAT at ₹1,332 Crore, +16% YoY TCPL has posted double-digit top line and bottom line growth during the first 9M of FY23 indicating a focus on profitable volume growth. With inflationary pressures likely to ease, the growth trajectory seems sustainable.
Frequently Asked Questions
Why are Tata Consumer Products share prices rising?
Tata Consumer Products share prices are rising due to – strong brand equity, extensive distribution network, good growth prospects in domestic and overseas markets. Improving financial performance and possible strategic acquisitions have also buoyed positive sentiment.
What are the future predictions for Tata Consumer’s market share?
Backed by distribution expansion, TCPL is expected to gain market share across Tea, Salt, Spices and Foods categories over the next 5 years. It aims to become the leading FMCG company in India by 2025.
Should I invest in Tata Consumer Products stock?
TCPL seems a good investment from a 2-3 years perspective considering its future growth plans in India and internationally. However, study company results, risks like inflation/currency rates before deciding to invest.
Is Tata Consumer Products share worth buying at current prices?
While valuations seem expensive with a P/E of 70+ times due to high growth expectations, long-term investors can accumulate the stock on market corrections. Future prospects backed by Tata brand equity appear promising.
Conclusion
Tata Consumer Products has trusted brands, strong fundamentals and long runway for domestic and international growth. While short term volatility can continue due to macroeconomic headwinds, it remains an attractive investment from 2-3 year horizon with potential upside to ₹1,600+ per share.