Hold Tata Global Beverages; target of Rs 147

Tata Global Beverages (TGBL) reported consolidated sales of Rs 1743.9 crore, up 2.6% YoY. Revenues of the branded division grew marginally by 1.8% (tea grew 2.4% YoY led by volumes but coffee segment declined 1.3% YoY). Non-branded segment grew strongly by 9.4% YoY. Outlook We expect the revenue for the company to grow at a CAGR of 9.1% and profit to grow at a CAGR of 10.2% over FY17E-19E. Maintaining our cautious outlook on the company’s growth outlook, we reiterate our HOLD rating on the stock with a target price of Rs 147 per share based on a 16x multiple of FY19E EPS of Rs 9.4.