Buy This Large Cap Tata Stock That Surged 113.15% In 3 Years

Prabhudas Lilladher has a "buy" rating on Tata Consumer Products Ltd. The brokerage firm believes that the Tata Group company is well-positioned to benefit from the ongoing structural growth trends in the Indian consumer market.

Tata Consumer Products is a leading player in the Indian consumer goods market with a strong portfolio of brands, including Tata Tea, Tetley, Eight O'clock, Tata Salt and Tata Sampann. The company has a pan-India presence and a strong distribution network.

Prabhudas Lilladher expects Tata Consumer Products to grow its revenue by 15-17% in FY23 and FY24, driven by volume growth and price hikes. The brokerage firm also expects the company to improve its margins by 100-150 bps in FY23 and FY24.

The stock-broking firm believes that Tata Consumer Products is a good long-term investment and has the potential to deliver superior returns to shareholders.

Here are some of the key reasons for Prabhudas Lilladher's positive rating on Tata Consumer Products:

Strong brand portfolio: The company has a strong portfolio of brands, which are well-known and trusted by consumers. This gives the company a competitive advantage in the market.

Pan-India presence: Tata Consumer Products has a pan-India presence, which gives it access to a large and growing consumer market.

Strong distribution network: It has a strong distribution network, which helps it reach consumers in all parts of the country.

Structural growth trends: The Indian consumer market is growing at a rapid pace, driven by factors such as rising incomes, urbanization and changing lifestyles. This provides Tata Consumer Products with a large and growing market opportunity.

Rating & View

"We expect NourishCo, Tata Soulfull and Tata Sampann to grow in high double-digits and increase their share in sales from current 15% in coming years. We believe steady growth in core Tea business and sustained traction in high growth segments will enable Tata Consumer Products to report strong growth in coming years. The stock trades at 44.7x FY25 consensus EPS. Not Rated," the brokerage firm said.

Dividend Details

For the year ending March 2023, Tata Consumer Products has declared an equity dividend of 845% amounting to Rs 8.45 per share. At the current share price of Rs 801, this results in a dividend yield of 1.05%. The company has a good dividend track report and has consistently declared dividends for the last 5 years.

Scrip Movement

In last one year, the share price of Tata Consumer Products has rallied by 4.59% while in three years, it has grown by 113.15%. The current stock price closed at Rs 800.60 per share, marginally down by 0.83%.

Disclaimer

The stock has been picked from the brokerage report of Prabhudas Lilladher. Greynium Information Technologies, the author or the brokerage house will not be liable for any losses caused as a result of decisions based on this write-up. Goodreturns.in advises users to consult with certified experts before making any investment decision.