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.

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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.

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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