Tata Consumer Products Ltd’s shares have undergone a massive re-rating since the restructuring of the Tata group’s consumer businesses last year. The trend has continued and even accentuated after the company’s June quarter results.

True, the non-alcoholic beverages and food company delivered a strong set of results, with pre-tax earnings increasing by around 42% year-on-year. But the stock’s 15 per cent jump in three trading days is clearly taking things a bit far.

In fact, Tata Consumer shares now trade at around 47 times estimated FY22 earnings based on Bloomberg data. Valuations are now on par with packaged foods company, Britannia Industries Ltd’s stock, which currently trades at about 47.5 times FY22 estimated earnings. Note that Britannia’s pre-tax earnings had increased by 81% for the June quarter, thanks to a spike in at-home food consumption as more people spent time indoors to protect themselves from the coronavirus.