Nirmal Bang Maintains 'Buy' Rating On Tata Consumer Products After Its Q2 Results; Here's Why

Nirmal Bang Report

A combination of high CPI inflation affecting urban demand, sharp spike in material costs (especially of tea and coffee), delay in taking price increases and an unusual impact on sales in the ready-to-drink business meant that Tata Consumer Products Ltd. Q2 FY25 results were well below expectations. 

The management stated that price increase in the domestic tea business, while likely to be staggered, could still impact volumes, but unorganized and small players tend to be affected more in such an inflationary environment.

Scale up in new acquisitions, Capital Foods and Organic India is now happening on target, after some initial hiccups.

We remain strong believers in the topline growth opportunity in the organized packaged foods business in India and on Tata Consumer as a strong play on this theme. Maintain Buy.

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