The Tata Consumer Products share price has delivered over 27% returns so far in 2025. According to domestic brokerage firm, Motilal Oswal, Tata Consumer Products has strong growth ahead. The brokerage has given the stock a ‘Buy’ rating with a target price of Rs 1,450. This implies an upside potential of about 21% from the current market price.
Let’s take a look at why Motilal Oswal is optimistic about the stock and what is driving its growth outlook.
Motilal Oswal on Tata Consumer Products: Earnings bounce back after three weak quarters
Tata Consumer Products, the fast-moving consumer goods (FMCG) arm of the Tata Group, reported around 8% year-on-year growth in earnings before interest and tax (EBIT) for the September quarter (Q2FY26).
According to the brokerage report, “The improvement was driven by strong performance in the India Branded business, which reported 47% YoY growth in EBIT.” However, the international beverages and non-branded businesses saw declines of 12% and 28%, respectively.
As per the brokerage, tea revenues grew 12% year-on-year with a 5% rise in volume, while salt revenues climbed 16% with 6% volume growth.
Motilal Oswal on Tata Consumer Products: Margins set to improve in second half of FY26
Motilal Oswal expects profitability to strengthen in the coming quarters. The report said, “We expect margins to expand in H2FY26, led by softening tea prices, improving product mix in the tea business (higher sales of premium tea); and the scale-up of the growth business (includes RTD, Tata Sampann, Capital Foods and Organic India; 30% of revenue contribution in Q2).”
Essentially, with raw material prices cooling and higher contribution from value added products, Tata Consumer’s margins are likely to inch higher in the second half of this fiscal year.
Motilal Oswal on Tata Consumer Products: Strong growth in ready-to-drink and new businesses
The company’s ready-to-drink (RTD) beverages segment, under the brand NourishCo, continued its momentum with revenue rising around 25% year-on-year. Volumes, too, were up 31% year-on-year.
As per the brokerage report, “Growth businesses (including RTD, Capital Foods, and Organic India) reported strong growth this quarter (27% YoY), led by robust growth in RTD (up 25%). Organic India and Capital Foods grew 16% YoY on a combined basis.”
Motilal Oswal on Tata Consumer Products: International performance mixed, but long-term outlook steady
The international branded beverages business reported 15% revenue growth year-on-year, but earnings fell 12% due to higher costs.
Meanwhile, the non-branded business which includes plantation and extraction saw revenue grow 28% year-on-year, though profits declined 28%.
Motilal Oswal on Tata Consumer Products: Growth outlook
Motilal Oswal believes that Tata Consumer will maintain its growth trajectory as new product launches, volume growth in tea, and expansion of the premium portfolio gather pace.
According to the brokerage, “We expect Tata Consumer Products to maintain its growth momentum, aided by growth in the core India business on the back of new product launches and volume growth in the tea business. Tea gross margins are expected to remain stable at 34-36%.”
