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Tata Consumer's FY22 annual report focuses on six strategic initiatives identified by the management to strengthen its foundation as a strong consumer products company.

“Tata Consumer's holistic strategy aims at transforming by strengthening and accelerating its core business, exploring new opportunities, unlocking synergies, digitization of the supply chain, expansion of its product portfolio and innovation," highlighted domestic brokerage and research firm Motilal Oswal.

The company is also enhancing its focus on premiumization and health and wellness products, embed sustainability, and expanding its sales and distribution infrastructure, supply chain, and capability building towards being a multi-category FMCG player.

“Tata Consumer Products is building Tata Sampann, which is their Pantry category. This should grow in high double-digits by capturing market share from unorganized players via an increase in distribution reach and product launches," it added.

The brokerage house expects a revenue/EBITDA/PAT CAGR of 11%/19%/29% over FY22-24 and has arrived at an FY24E SoTP-based target price of 900 per share, implying a potential upside of about 25% from current stock level. It has maintain its Buy rating on Tata Consumer shares.

“The unlocking of sales and distribution synergies from the merger of group companies has started to yield results. This is evident from the market share increase in Tea (+100bp YoY) and Salt (+400bp YoY) as of Mar’22, backed by an increase in numeric distribution. The company is establishing a strong S&D channel, which will act as a key growth driver," Motilal Oswal said.

In FY22, Tata Consumer expanded into new target markets, launched regional focused packs, unveiled impactful campaigns across multiple platforms, and drove premiumization.

Tata Consumer Products, part of Indian conglomerate Tata Group, is a fast-moving consumer goods company (FMCG). The Tata Group stock has declined more than 2% in 2022 (YTD) so far whereas it is down about 3% in a year's period.

The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.

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