Despite a hefty tax notice, Tata Consumer remains resilient as Goldman Sachs raises its rating to “Buy,” citing strong earnings potential and business expansion
Tata Consumer Products (TCPL) has received an income tax demand of Rs 262.88 crore from the Assistant Commissioner of Income Tax, Circle 4(1), Kolkata, as per a regulatory filing on April 1, 2025. The tax assessment, issued under Section 143(3) of the Income-tax Act, pertains to the financial year 2021-22 and includes interest on the outstanding amount.
In response, the company has stated that it believes the demand is not maintainable and intends to challenge the order. Tata Consumer assured investors that the tax demand is unlikely to have an immediate impact on its financials or business operations.
Despite this regulatory setback, Goldman Sachs has upgraded Tata Consumer Products’ stock rating to “Buy” from its previous stance and raised the target price to Rs 1,200 from Rs 1,040. The investment firm anticipates strong earnings per share (EPS) growth between FY 2025-27, driven by multiple factors, including a recovery in tea margins, price hikes, expansion in distribution, and lower net interest costs as the company repays its acquisition-related debt.
At 11:52 AM today, Tata Consumer shares were trading at Rs 1,063.70, up Rs 71.45 or 7.20% on the National Stock Exchange (NSE), reflecting strong investor confidence despite the tax challenge.
Goldman Sachs acknowledged the competitive intensity in the FMCG sector but expressed optimism that “the worst is likely behind” Tata Consumer. The stock upgrade highlights the company’s strategic resilience, even as it navigates regulatory hurdles while strengthening its position in India’s growing consumer market.
