Q3FY23 Preview: Tata Consumer Products: Revenue seen at Rs34,668 million, PAT at Rs2,822 million

30 Jan 2023 , 04:24 PM

Result date: 2^nd February, 2023

Recommendation: Add

Target price: Rs 850

Tata Consumer Products (Tata Consumer) could post mid-single digit decline in sales volumes of tea amid late onset of winter and higher competition from regional players. Foods business would see continued traction. Salt would witness low single-digit volume growth. NourishCo should continue its momentum and deliver strong growth in the quarter. Overall, analysts at IIFL Capital Services expect the company to post sales growth of 8% over the year ago quarter.

EBITDA though is expected to remain flat over the year-ago quarter, partly due to weakness in EBITDA of international tea and B2C Coffee + Vietnam segments. Higher tea prices and unfavorable currency are other margin headwinds.

Profit After Tax (PAT) could grow 2.7% as compared to the year-ago quarter.

Important management insights to watch out for:

• Tea prices and volumes
• Demand trends across key markets and product categories
• Outlook on input costs, pricing action and margins

Rs Million	December 2022 estimates	YoY change
Revenue	34,668	8.1%
EBITDA	4,605	(0.3)%
Profit After Tax	2,822	2.7%

Source: IIFL Research