Tata Consumer shares hit 2-year high as analysts back strong growth outlook

Shares of Tata Consumer Products surged about 7% on Monday, hitting their highest level in over two years, after the company forecast double-digit revenue growth for fiscal 2027 and reported quarterly earnings that surpassed analyst estimates.

The stock rose as much as 6.90% during trading by midday, making it the top gainer on the Nifty FMCG index.

The broader benchmark Nifty 50 index fell more than 1% amid concerns over rising energy prices linked to the Iran conflict and calls by Prime Minister Narendra Modi for consumers to conserve fuel and curb discretionary spending.

The Tata Group company, known for brands including Tetley tea and Tata Salt, has attracted strong support from brokerages after management projected sustained growth despite inflationary pressures and geopolitical disruptions.

Strong growth outlook lifts sentiment

Brokerages remained optimistic on the company’s medium-term prospects, citing improving demand trends, stronger distribution and growth in premium product categories.

According to LSEG data, 26 analysts covering the stock maintain an average “buy” rating, with a median target price of 1,315 rupees.

Analysts at CLSA said Tata Consumer’s growth trajectory was likely to continue, supported by an improved go-to-market strategy and rapid expansion in digital channels such as e-commerce and quick commerce.

These channels now contribute 34% of the company’s India revenue.

BoB Capital Markets said it expects the company to deliver compound annual growth of around 10% in sales, 14% in EBITDA and 18% in earnings between fiscal years 2026 and 2029.

Systematix analysts also highlighted strong volume-led growth across the company’s India beverages and foods business, while noting management’s guidance for further margin expansion.

Margins seen improving

The company said tea prices remained largely stable while coffee prices had started easing, factors expected to support margins in the coming quarters.

Tata Consumer forecast EBITDA margin expansion of 50 to 70 basis points in the current fiscal year, although this would be slower than the 100 basis point improvement recorded in fiscal 2026.

Management added that any broad-based fuel inflation linked to higher crude prices would likely be passed on through product pricing.

India’s consumer goods companies have been facing pressure from rising raw material and energy costs following the escalation of tensions in the Middle East.

Rivals, including Dabur India and Britannia Industries, have already implemented price hikes to protect margins.

Premium portfolio drives expansion

The company’s growth portfolio, which includes health-focused brands such as Organic India and Tata Sampann, posted revenue growth of 33% from a year earlier.

Tata Consumer said it expects the segment to continue growing at around 30% in the near term as it expands its premium offerings and reduces dependence on volatile commodity-linked businesses.

The company also acknowledged that shipping disruptions linked to the Middle East conflict had affected some export-led operations in March.

However, it said supply chains had normalised since April, with risks mitigated through alternative sourcing strategies and pricing power.

Analysts said improving urban demand, aided by recent tax cuts aimed at boosting consumption, could further support the company’s growth momentum in the coming quarters.