Motilal Oswal's research report on Tata Consumer Products
TCP reported a strong operating performance, led by gross margin expansion of ~540bp YoY to 44.6% in 4QFY22. Earnings were driven by its standalone business (gross margin expanded by 930bp YoY and 140bp QoQ) on benign Tea prices. However, higher investments behind brands and other expenses restricted consolidated EBITDA growth to 48%. Margin in the India Foods business was impacted by inflation and investments in new businesses. The management guided at double-digit growth, with a constant expansion of its portfolio. Factoring in an in line performance in 4QFY22, we maintain our FY23 and FY24 earnings estimate.
Outlook
We arrive at our SoTP-based TP of INR900 and maintain our Buy rating.
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