Tata Consumer Products Limited

“TCPL owns real brands with durable equity in Indian salt and tea, backstopped by the Tata halo and deep distribution, but ten years of ~9% ROCE — persistently below cost of capital — expose a structural, not cyclical, inability to compound value. Serial acquisitions at 30-40x EBITDA have bloated a goodwill-heavy balance sheet without improving returns. At 76x trailing P/E and 42x EV/EBITDA, the market prices in a profitability transformation that has never materialized across multiple management cycles. The India foods tailwind is real, but TCPL is not the best vehicle to ride it. Expected 10-year returns barely exceed 2x in a bull case. The risk of permanent capital impairment is real — not from brand failure, but from paying an exceptional price for a mediocre compounder.”