Shares of Tata Consumer jumped close to 2.5% on Wednesday to hit a new 52-week high of ₹877.20. Analysts at Sharekhan and ICICI Securities see the stock going up at least another 10%.
The Tata Consumer Analysts: Sharekhan analysts maintained their ‘buy’ rating for the stock with a price target of ₹1,010 – around 17% upside from the stock’s last closing price of ₹858.90.
Manoj Menon-led analyst team at ICICI Securities also maintained their ‘buy’ for the stock raising the target price of ₹950 from ₹900.
The Tata Consumer Thesis: In its latest report, Sharekhan highlighted that the Tata Group company has made substantial progress in strengthening core businesses and expanding its total addressable market in FY2023 (April 2022- March 2023).
Analysts at ICICI Securities also noted that the FMCG giant has expanded its direct reach to 15 lakh outlets in FY23 from 13 lakh outlets in FY22. The total outlet reach stands at 38 lakh at the end of FY23.
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Both the brokerage firms highlighted the growth in Starbucks. Sharekhan noted that Tata Starbucks – JV scaled up, with revenue crossing the ₹1,000 crore mark in FY2023. Analysts at ICICI Securities added that the business was now EBIT-positive.
Sharekhan expects the company’s profits to grow by 23.1% in FY24 and 19.1% in FY25. Considering the company’s strong growth prospects and sturdy cash flows the brokerage added that Tata Consumers remains one of its top picks in the FMCG sector.
ICICI Securities also said that its long-term positive view on the stock is intact and expects the company to use the additional resources/ bandwidth to focus on improving competitive advantages in FY24.
Price Action: Tata Consumer’s share price was up 0.24% to trade at ₹860.95 in the late hours of trading on Wednesday.
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