Motilal Oswal: Tata Consumer Products - Pricing Power In Tea To Negate Impact On Margins

BQ Blue’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages. These reports offer BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..Motilal Oswal Report.Tea prices in North India have increased to Rs 261/kilogram (weighted average) over April-September 2020 (versus Rs 162/kg during the same period last year).Note that all India weighted average tea prices have increased to Rs 224/kg (versus Rs 149/kg last year).In this note, we have analyzed the impact of the increase in tea prices on Tata Consumer Products Ltd. in the near term as well as over the long term.Key insights highlighted below -Lower supply and higher demand drives Indian tea prices higher - India is the largest producer of black tea in the world and accounts for the highest consumption of tea globally.In FY19, tea production in India stood at 1,350 million kg. Of this, 1,090 million kg was consumed domestically (81% of India’s production) and balance 260 million kg was exported.In FY19, Tata Consumer Products sold 124 million kg, accounting for 11% of India’s total tea consumption.The company has approximately 20% volume market share in the domestic organized market..Click on the attachment to read the full report:.DISCLAIMERThis report is authored by an external party. BloombergQuint does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the brokerage and do not represent the views of BloombergQuint. .Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

Motilal Oswal: Tata Consumer Products - Pricing Power In Tea To Negate Impact On Margins

Motilal Oswal: Tata Consumer Products - Pricing Power In Tea To Negate Impact On Margins

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