India's Tata Consumer jumps most in nearly 19 months; broker upgrades cite margin improvement (updated)

Tata Consumer Products

27/10/2026 04:04

Adds analyst comments, closing share move in paragraphs 1-5
By Surbhi Misra
Oct 27 (Reuters) - India's Tata Consumer Products TACN.NS posted its biggest one-day gain in nearly 19 months on Tuesday, after two brokerages upgraded the stock following better-than-expected earnings, citing strong growth in newer businesses and scope for margin improvement.
Shares closed 6.78% higher at 1,000 rupees, marking their biggest one-day percentage gain since April 2, 2025.
Tata Consumer's newer businesses had established themselves in their respective categories despite intense competition, with profitability improving as they scale up, said Abhishek Mathur, lead analyst at Systematix Group, upgrading the stock to "buy" from "hold".
"Margins are now starting to pick up strongly for Tata's Sampann foods business compared to five years ago when it was loss-making," Mathur said, adding that it should improve over the next two to three years. 
Tata Sampann, which sells packaged staples such as pulses, spices, dry fruits and cooking oils, recorded 57% revenue growth.
Citi, which maintained its "buy" recommendation, forecast overall margin improving by about 50 basis points in the second half of fiscal 2027 as price hikes in the tea and salt segments take effect.
Tata Consumer has raised tea prices by 8%-10% this fiscal year and salt prices by about 6% in October, with benefits expected from the December quarter.
BOB Capital Markets also upgraded Tata Consumer to "buy" from "hold", saying it expects growth in newer businesses and that price increases would support earnings.
The consumer goods firm reported a 16% rise in second-quarter profit to 4.69 billion rupees ($49.27 million) on Monday, beating analysts' estimate of 4.66 billion rupees, according to LSEG-compiled data.
Revenue rose 14% to 56.61 billion rupees, also above estimates, supported by growth in packaged foods, beverages and salt. Tea volumes remained flat.
Jefferies retained its "buy" rating, saying the firm was well placed to benefit from the rapid expansion of quick commerce, particularly through its packaged foods and beverages portfolio.    
   
($1 = 95.1850 Indian rupees)

 (Reporting by Surbhi Misra in Bengaluru; Editing by Sherry Jacob-Phillips)
 ((Surbhi.Misra@thomsonreuters.com ||  www.linkedin.com/in/surbhi-misra9/;))