Tea prices easing, Tata Consumer & HUL to benefit, says Goldman Sachs

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Tata Consumer is buzzing in trade after Goldman Sachs put out a note stating that tea price inflation is easing. According to the note, the prices of tea have come off 26 percent from the peak seen in August 2020 and that boards well for companies like Tata Consumer and Hindustan Unilever (HUL).

Tata Consumer is buzzing in trade after Goldman Sachs put out a note stating that tea price inflation is easing.
According to the note, the prices of tea have come off 26 percent from the peak seen in August 2020 and that boards well for companies like Tata Consumer and Hindustan Unilever (HUL).
Tea prices had seen an inflation of nearly 38 percent in FY21 and as a result of which there were severe gross margin pressure for Tata Consumer over the past three quarters.
Goldman Sachs believes that prices will come off because, as per their metrics, the production that they had marked in April and May was 29 percent year-on-year, and if this trend continues tea prices will reduce further and that will impact their margins positively.
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