Tata Consumer (TATACONSUM)

FairStock Score: 45/100 — MIXED

Score breakdown: P/E: 0/3 · ROCE: 0/2 · Growth: 2/2 · Dividend: 0/1

Key Financials

AI Analysis

AI-generated, general educational analysis — not personal investment advice.

I wear two hats: Graham's demand for margin of safety and Buffett's preference for durable compounding. Tata Consumer, in tea and coffee, shows some quality. Sales grew 11.20%, and five-year revenue CAGR is 12.82%, so the top line is moving. The balance sheet is conservative: debt/equity 0.12, Altman Z-score 3.63, and Piotroski F-score 8/9. Promoter holding 33.84% aligns interests somewhat. But earnings are not following sales: profit growth is 0.04%. ROE 7.34% and ROCE 9.16% are modest for a business quoted at ₹1.07 lakh Cr. Free cash flow is negative ₹246 Cr, which I dislike; low debt gives staying power, but cash burn is a yellow flag. Latest quarter sales were ₹5,112 Cr with net profit ₹385 Cr, so the conversion is thin. Valuation is the real problem. At ₹1,079.50, P/E is 65.35, P/B 4.90, EV/EBITDA 21.76, and PEG 179.01. Graham Number is ₹261.53; the margin of safety is -336.28%. The 52-week range of ₹945.00–₹1,282.70 and book value of ₹220.17 do not offer Graham comfort. Dividend yield is only 0.93%. FairStock score 45/100 confirms mixed. This may be a stalwart brand, but financially it behaves more like a slow grower until profit growth, ROE and cash flow improve. I would wait for a much lower price or evidence of durable earnings compounding before committing capital. That is not the bargain I seek.

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Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer