With both tea and coffee prices showing supportive trends, analysts expect a positive backdrop for companies exposed to these categories. Nuvama Institutional Equities has reiterated its previous rating on Tata Consumer Products, highlighting potential tailwinds across its portfolio.

“Tea prices in India have corrected 8-10% year-on-year, and with the first two months’ crop turning out well, we expect the next one year’s tea costs to remain benign,” said Abneesh Roy, executive director, Nuvama Institutional Equities. He pointed out that Tata Consumer has cut prices across several tea brands, a move expected to continue until fresh stock arrives in the third quarter. “Volume growth in tea shall improve as the prices correct,” he added.

Coffee prices, meanwhile, are trading about 4% below all-time highs, reversing after a 30% drop from their peak. A dry September in Brazil has driven the recent uptick. “If the current inflationary trend in coffee prices continues, Tata Consumer’s non-branded coffee business, which was impacted in Q1 due to falling prices, can potentially fare well in the second half of FY26,” Roy said.

On the beverages side, Nuvama’s checks suggest Tata Consumer’s NourishCo business may outperform summer-focused peers such as Varun Beverages, Emami, and United Breweries in Q2.

The brokerage also flagged limited regulatory impact. Most of Tata Consumer’s portfolio already falls under the 0-5% GST slab, with some benefit expected for its water business. Additionally, any resolution of US-India tariff issues could ease uncertainty for subsidiaries Capital Foods and Organic India.

While Tata Consumer’s stock has lagged behind some FMCG peers, Nuvama believes the risk-reward balance remains favourable. “The downside is limited and the stock could do well over the medium to long term,” Roy said.

Nuvama said it is yet to build its Q2 preview numbers but maintained its positive stance, citing the improving commodity cycle.

The company posted revenue from operations for the quarter ended 31st March 2025 at ₹4,608 crore up 17% YoY (12% organic) and for the year at ₹17,618 crore up 16% YoY (9% organic).