Tata Consumer Products Q3FY22 preview: Revenue seen at Rs 31,310 million, PAT at Rs 2,551 million

1 Feb 2022 , 10:37 AM

Result date: 2^nd February, 2022
Recommendation: Add
Target price: Rs. 800
 
Tata Consumer Products is likely to post a mixed performance for Q3FY22. Its revenue growth is likely to be among the lowest within the FMCG space, though it could be one of the few companies in the sector to witness strong expansion in gross and EBITDA margin on a YoY basis.

The company’s domestic sales will be flattish owing to a high base, particularly in the tea segment. Price hikes implemented in the salt business could also put some pressure on volumes of this segment. Performance of international business is likely to be flattish both for branded tea and coffee segments.

Easing prices of tea though could aid standalone gross margin during the quarter. Despite high advertising spends on an absolute basis as well as a % of sales, the company could post high growth in its EBITDA.

Important management insights to watch out for:

• Trends in demand, market share movement in key markets and segments
• Outlook on price hikes, input cost inflation and margins

 

Rs. Million	December 2021 estimates	YoY change
Revenue	31,310	2.0%
EBITDA	4,293	18.8%
PAT	2,551	14.3%

Source: Company, IIFL Research