TATACONSUM - Fundamental Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Fundamental Rating: 3.1

📊 Core Financials Analysis

Profitability & Returns

ROE: 7.01% and ROCE: 9.16% are modest — below industry benchmarks, indicating limited capital efficiency.

EPS of ₹13.4 is low relative to the current price of ₹1,062, suggesting weak earnings yield.

PAT growth of 10.1% QoQ (₹332 Cr. vs ₹310 Cr.) shows steady but unspectacular momentum.

Debt & Liquidity

Debt-to-equity ratio of 0.12 is healthy — low leverage and strong balance sheet.

Dividend yield of 0.78% is modest, reflecting limited income generation for shareholders.

📉 Valuation Indicators

Metric Value Insight

P/E Ratio 80.1 Extremely overvalued vs. industry PE of 15.5

P/B Ratio ~5.26 High, but tolerable for consumer brands

PEG Ratio 8.54 Indicates overvaluation relative to growth

Intrinsic Value Likely below CMP Due to weak returns and high valuation multiples

🏢 Business Model & Competitive Advantage

Business Model: Tata Consumer Products operates in beverages (Tata Tea, Tetley), packaged foods, and water — with growing presence in health and wellness.

Strengths

Strong brand equity under Tata umbrella.

Diversified product portfolio and improving distribution.

Weaknesses

High valuation not supported by earnings growth.

Low ROE/ROCE and EPS limit attractiveness.

📌 Entry Zone & Investment Guidance

Entry Zone: ₹950–₹980 range would offer better margin of safety, especially near 200 DMA (₹1,066).

Long-Term View

Hold only if expecting long-term brand monetization and margin expansion.

Avoid fresh entry at current levels due to valuation concerns.

Watch for earnings upgrades and margin improvement before accumulating.

Would you like a comparison with peers like Nestlé India, Britannia, or HUL to assess relative value in the FMCG space?

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