Shares of Tata Consumer Products were gaining on Wednesday after the company posted strong second-quarter results that beat street estimates thanks to boosted margins resulting from price hikes.
What Happened: The firm reported a 1.18% year-on-year growth in consolidated net profit to ₹359.18 crore for the quarter ending in September, up from ₹354.98 crore in the same quarter of the previous fiscal year. Total revenue for the quarter stood at ₹3,733.78 crore, marking an 11.02% rise from ₹3,363.05 crore posted last year.
The results beat estimates from analysts at Morgan Stanley, who maintained an “overweight” rating for the stock and set a target price of ₹933 per share.
Tata Consumer’s gross margins expanded by 76 basis points year-on-year, reaching 42.5%. The India business sector grew 11%, while the international segment reported a 13% year-on-year increase.
Nuvama Institutional Equities maintained a “buy” rating and has set a target price of ₹1,035 per share on the stock.
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Tata Consumer Products also announced the merger of its subsidiaries, NourishCo Beverages and SmartFoodz, with the parent entity, with the aim of generating synergies and cost savings.
Price Action: Tata Consumer’s share price was up 0.6% at ₹905.80 in early trade on Wednesday.
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