Tata Consumer stock rises as growth momentum continues as Q2 earnings exceed market expectations

 Tata Consumer stock rises as growth momentum continues as Q2 earnings exceed market expectations

In Q2, Tata Consumer's consolidated net profit above projections by Rs 341 crore, coming in at Rs 359.18 crore.

The shares of Tata Consumer have increased 15.45 percent in the last six months.

On November 1, Tata Consumer shares increased by 1% after the FMCG company's announcement of a consolidated net profit of Rs 359.18 crore for the quarter that ended in September. This figure above market forecasts, as price increases increased margins.

Because the earnings exceeded its projections, Morgan Stanley maintained its "overweight" call on Tata Consumer shares, with a target price of Rs 933 per share. Compared to the previous closing price of Rs 900, this is a 3.7% increase.

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Tata Consumer's net profit increased from Rs 354.98 crore in the same quarter of the previous financial year to 1.18 percent year over year growth. At Rs 3,733.78 crore, the overall income was up 11.02 percent from Rs 3,363.05 crore in the same period last year.

Gross margins increased by 76 basis points on an annual basis to 42.5 percent. The foreign business expanded by 13 percent year over year, while the India business grew by 11 percent.

Shares of the business were up 0.36 percent from the closing price of the previous session as of 9.20 a.m. on the NSE, trading at Rs 903.65.

Tata Consumer Products had a little decline in its market share of 44 basis points in salt during the quarter, and a decline in market share of 37 basis points in volume and 95 basis points in value in tea. Morgan Stanley said that Tata Consumer's declining market share in tea and salt is detrimental to the company's prospects.

Sampann, Soulfull, and NourishCo—the "India Growth" businesses—continued to gain momentum; during the quarter, they expanded by 39% and accounted for 18% of the firm's India revenue, according to a filing the company made with the exchanges. Morgan Stanley went on to say that the development trend seen in "growth" industries is encouraging for the FMCG company.

"In general, it appears that the India tea industry and global margins are suffering," said Nuvama Institutional Equities, which issued a "buy" recommendation with a target price of Rs 1,035 per share.

In addition, Tata Consumer Products stated that NourishCo Beverages and SmartFoodz, two of its subsidiaries, will be combined with the main company. This move is anticipated to provide savings and synergies.