Shares of Tata Consumer Products tanked over 6% on Monday after the company reported its second-quarter earnings after market hours last week.

What Happened: The Tata Group firm’s net profit rose 7.7% year on year to ₹364.42 crore for the July to September quarter, up from ₹338 crore a year earlier. Revenue from operations reached ₹4,214.45 crore, reflecting a 13% increase from ₹3,734 crore in the previous year.

The revenue figures fell short of analysts' expectations, who had projected an average of ₹4,337 crore, while net profit was slightly above the estimated ₹339 crore.

Brokerages’ Estimates: Goldman Sachs said the company’s second-quarter results showed a sharp slowdown in its India business, and there will be more margin headwinds going ahead.

India’s organic business experienced a significant slowdown across various categories whereas ready-to-drink beverages are facing competitive challenges, putting pressure on margins for the India business, the brokerage noted. It had a “neutral” rating on the stock with a target price of ₹1,050.

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Jefferies recommended to “hold” Tata Consumer Products with a target price of ₹1,170. The company reported another weak quarter, particularly in its India business, impacting both revenue and margins, it said.

The brokerage added that it was for noting that like-for-like EBITDA dropped sharply by 23%, primarily due to significant input cost inflation in the tea segment. Additionally, the tea business experienced a decline in volume, the brokerage said.

Morgan Stanley maintained its “overweight rating” on the company but lowered the target price for the company to ₹1,273. The organic business saw weak revenue growth of 5%, with a decline in tea volumes. Growth in other segments was also softer at 15%, but the non-branded and international segments continued to perform well, it said.

Kotak Securities said the fast-moving consumer goods firm missed its revenue estimates but net profit grew above expectations while EBITDA was in line with the brokerage’s estimates.

Kotak said the company’s internals were weak, where a sharp miss in its India business was offset by a beat in overseas business and expects a weaker second half in FY25. Kotak has an “add” call on the stock with a target price of ₹1,110.

Price Action: Tata Consumer’s shares were down 6.21% to ₹1,025.35 on Monday morning.

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