Shares of Tata Consumer Products surged 5.53% to touch Rs 988.30 on Tuesday, October 27, gaining Rs 51.80 per share in a single trading session. The rally unfolded as investors reacted positively to the company's financial performance for the September quarter. The strong rebound followed a period of weakness ahead of the earnings release, which saw the stock slip to Rs 936.50 on Monday, October 26.
Rebound from Near 52-Week Lows
The closing price of Rs 936.50 on Monday placed the counter near the lowest band of its 52-week trading corridor, which spans from Rs 916 to Rs 1,282.70. Despite the single-day advance of 5.53%, the shares continue to carry substantial losses accumulated over the past six months. Over that six-month stretch, the stock remains down by 14.84%, representing a decline of Rs 172.20, and still trades roughly 23% below its 52-week peak.
Revenue and Earnings Outpace Brokerage Projections
Underpinning the investor buying were robust operating metrics across key segments. Tata Consumer posted revenue from operations of Rs 5,661 crore for the second quarter of FY27, representing a 14% year-on-year increase. Operating profit mirrored this trajectory, with EBITDA climbing 18% from the corresponding period of the previous year to reach Rs 794 crore.
Consolidated net profit for the group expanded 16% year-on-year to approximately Rs 470 crore. This outturn surpassed market estimates, as a consensus forecast compiled from 11 brokerages had pegged net profit at roughly Rs 466 crore, which would have represented a 15% increase. The company's basic earnings per share came in at Rs 4.75, while adjusted earnings per share reached Rs 5.18 after accounting for exceptional items and amortization charges associated with the acquisitions of Capital Foods and Organic India.
Volume Growth and Portfolio Diversification
Underlying sales volumes represented the highlight of the quarterly financial statement. The India branded operations delivered an underlying volume growth of 11%. Simultaneously, the company's designated growth businesses saw revenues expand by 40%. Within this basket, Tata Sampann demonstrated remarkable momentum with a 57% expansion, while the ready-to-drink division posted a 47% rise.
These product categories form the core of the group's strategic push to accelerate financial performance and expand beyond its traditional foundation in tea and salt. For the first half of FY27, overall net profit grew 22% to Rs 897 crore, alongside an adjusted EPS of Rs 9.85, up 21% from the prior-year period.
Analyst Assessment and Target Price Adjustment
Following the quarterly disclosure, Elara Capital maintained an Accumulate recommendation on Tata Consumer Products while lowering its 12-month target price. The brokerage cut its target from Rs 1,290 to Rs 1,080, an adjustment of roughly 16%. Against the Tuesday price level of Rs 988.30, the revised target suggests an upside potential of approximately 9%.
In its analysis, the brokerage noted that second-quarter revenue grew 14% year-on-year to Rs 56.6 billion, matching expectations, with India branded underlying volume advancing 11% behind a 40% year-on-year surge in the growth portfolio. The primary driver behind the reduced price target was a revised appraisal of the Tata Starbucks joint venture, whose contribution to the valuation was trimmed by roughly 26%, declining from Rs 54 per share to Rs 40 per share.
