Sharekhan's research report on Tata Consumer Products
Tata Consumer Products Ltd (TCPL) is looking to transform itself into a multi-layered FMCG company by seamlessly integrating acquired businesses, streamlining supply chain & distribution and strengthening core foods & beverages businesses through innovation. Focused execution, robust distribution network and market share gains helped TCPL clock strong revenue and operating profit growth of 20% each in an uncertain FY2021. Distribution and supply efficiencies helped reduce working capital cycle by ~20 days; FCF/EBIDTA ratio improved to 80% and the company has strong liquidity of Rs. 3,000 crore. Strengthening of core businesses and synergies from acquired businesses would help TCPL record a revenue/PAT CAGR of 13%/16% over FY2021-24.
Outlook
We maintain a Buy on the stock with a revised price target of Rs. 875.
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