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Tata Consumer Products, the owner of iconic brands like Tetley tea and Ching’s Secret noodles, reported a disappointing start to the financial year, with its consolidated net profit for the June quarter declining by 8.3% year-on-year to Rs 290 crore. This fall, which missed analysts' expectations, was attributed to muted demand stemming from heatwaves and elections during the quarter.
While the company's revenue for the quarter grew by a healthy 16.3% year-on-year to Rs 4,352 crore, aligning with market estimates, the profit shortfall raised concerns among investors. Notably, the earnings before interest tax depreciation and amortization (EBITDA) for the quarter reached Rs 667 crore, demonstrating a 22.4% year-on-year increase. This positive development was accompanied by a 70 basis point expansion in the Ebitda margin, reaching 15.3% compared to the previous year.
The company's India Beverages segment, encompassing brands like Tata Tea, Organic India, and Himalayan, witnessed a 6% year-on-year growth in revenue, reaching Rs 1,523 crore for the quarter. However, tea volumes remained stagnant compared to the previous year. The Nourishco business, which focuses on ready-to-drink products, recorded a 7% year-on-year revenue growth.
The India Foods segment showcased a remarkable performance, with revenue rising by 30% year-on-year to Rs 1,346 crore. This growth was driven by a 10% volume increase across brands like Tata Salt, Tata Sampan, Chings Secret, Smith & Jones, Tata Soulfull, and others. Salt revenue saw a 9% growth fueled by robust volume expansion, with the premium salt portfolio witnessing a significant 35% growth.
Capital Foods and Organic India, two key acquisitions for Tata Consumer, contributed 29% to the company's India business. The international business, featuring brands like Tetley, Eight O’Clock, Teapigs, and Good Earth, recorded a 10% revenue growth, reaching Rs 988 crore, with earnings before interest and tax expanding by 46% due to pricing strategies and cost-saving initiatives.
The company's coffee segment continued its strong performance, exhibiting a 28% revenue growth. Tata Starbucks opened 17 new stores during the quarter, bringing the total store count to 438 at the end of Q1. Despite the challenging macro environment, Tata Consumer expressed confidence in its ability to navigate these headwinds. The company highlighted that it has successfully integrated its recent acquisitions, Capital Foods and Organic India, and is actively pursuing synergies to bolster growth.
Looking ahead, Tata Consumer emphasized its commitment to execute its strategic priorities and deliver consistent and profitable growth. The company's focus on strengthening its sales and distribution infrastructure in India, expanding its presence in the health and wellness market, and leveraging its international portfolio to capitalize on global trends positions it for continued growth in the future.
Source: Tata Consumer Q1 profit falls 8.3%, misses estimates