Growth in food business may drive gains for Tata Consumer Products

Margin gains, however, will depend on raw material inflation, pricing action

The Tata Consumer Products stock has been an outperformer doubling in value (101 per cent gain) over the past year leaving its peer index, the Nifty FMCG as well as the benchmark Nifty with returns of 27 per cent and 59 per cent respectively, far behind. The rerating for the stock has been based on expectations of higher growth, market share improvement, and margin gains.

The company has been a strong beneficiary of the shift in consumer behaviour in FY21 from loose to packaged foods gaining market share across segments. The Indian beverage business, largely tea, posted a 32 per