Tata Consumer stock surges over 6%, leads Nifty gainers after Q2 profit rises 18%; Citi, Morgan Stanley bullish

The stock has declined 15.9 percent so far in 2026, compared with a 13 percent fall in the Nifty 50. The rally came amid a muted broader market. At 9:50 am, the Nifty 50 was flat at 22,755. Citi maintained its Buy rating on Tata Consumer Products but lowered its target price to Rs 1,225 per share, still implying about 31 percent upside from yesterday’s close. The brokerage highlighted the company's 14 percent year-on-year revenue growth and 17 percent EBITDA growth in the September quarter.

India's underlying volume growth stood at 11 percent, with salt volumes rising 9 percent. Growth businesses expanded 40 percent, led by Tata Sampann and ready-to-drink beverages. However, Citi said that weakness in the tea business and input cost inflation continued to pressure domestic margins. The brokerage expects a clearer recovery in margins during the second half of FY27 as pricing actions take effect.

Stronger profitability in international and non-branded businesses also supported the company's overall performance. Morgan Stanley maintained its Overweight rating on Tata Consumer Products, with a target price of Rs 1,202 per share. The brokerage highlighted that revenue, EBITDA and adjusted net profit grew 14 percent, 17 percent and 18 percent year-on-year, respectively, during the September quarter.

EBITDA margin expanded 31 basis points to 13.8 percent, although it remained slightly below estimates. India branded business revenue growth accelerated to 17 percent, supported by 11 percent volume growth. The brokerage believes margin-related concerns are largely reflected in the stock price. Tata Consumer Products reported a 17.6 percent year-on-year increase in consolidated net profit to Rs 467 crore for the quarter ended September 30, 2026, compared with Rs 397 crore a year earlier.

The figure exceeded the CNBC-TV18 poll estimate of Rs 456 crore. Revenue from operations rose 14 percent to Rs 5,661 crore, ahead of the poll forecast of Rs 5,605 crore. EBITDA increased 16.5 percent to Rs 783 crore from Rs 672 crore in the year-ago quarter, while EBITDA margin improved to 13.84 percent from 13.5 percent. The company's India branded business recorded 11 percent underlying volume growth, supported by higher salt sales and continued expansion in Tata Sampann and ready-to-drink beverages.