Informist, Wednesday, Jul. 23, 2025

By Anand JC and Avishek Rakshit

NEW DELHI/KOLKATA – A strong growth in its core categories – tea and salt, supported by underlying volume gains in its Indian operations, and narrowing losses from its plantations business, helped Tata Consumer Products Ltd. report a 15.1% on-year growth in its consolidated net profit for the June quarter at INR 3.3 billion. The profit narrowly missed the Street's expectation of INR 3.4 billion.

A 12% on-year revenue growth in its packaged beverages business in India, together with a 14% on-year top line growth in its domestic foods business, and 5% constant currency revenue growth in international operations, led Tata Consumer to report a 9.8% growth in its consolidated top line for the June quarter at INR 47.8 billion. The revenue, however, missed the Street's projection of INR 48.4 billion. Owing to the short summer season and the early onset of the monsoon, the ready-to-drink beverages category took a beating and reported a moderate volume growth of only by 3% during the quarter under review.

Its associate company, Amalgamated Plantations Pvt. Ltd., which is into the business of tea plantations and limited retailing of tea, also narrowed down its losses on year to 147 million during the June quarter as compared to the loss of INR 249 million in the year-ago quarter which strengthened the profit. Although Tata Consumer had to procure tea at higher than normal prices from the auctions in north and south India, higher tea prices led to an improvement in the earnings of Amalgamated Plantations which helped it reduce losses.

OPERATIONAL PERFORMANCE

The company's consolidated earnings before interest, taxes, depreciation, and amortisation for the June quarter were INR 6.2 billion, down 8% on year. Tata Consumer attributed this fall to higher tea costs in India and coffee price corrections in the non-branded segment. Its EBITDA margin contracted 250 basis points to 12.9% for the quarter.

The Tata Tea seller's India branded business reported an underlying volume growth of 6.8% during the reporting quarter while its core India business saw a double-digit growth in both tea and salt, the company said in a presentation to its investors.

Its 'growth' business--Tata Sampann, Ready to Drink, Tata Soulfull, Capital Foods, Organic India--reported a 7% growth for the quarter on an aggregated basis as Tata Sampann line of products grew 27% on year. The company said its ready-to-drink business recorded a growth even though unfavourable weather negatively impacted the business. Tata Consumer launched eight new products as part of this category across new segments.

Tata Consumer said that its international business registered a 5% revenue growth in constant currency terms, driven by strong performance of coffee operations in the US. While coffee prices are falling, ongoing volatility warrants close monitoring, the fast moving consumer goods major said. Revenues from coffee operations in India grew 67% for the quarter, it said.

"Tea prices remain favorable; however, the outlook remains cautiously optimistic," the company added. Its key tea brands include Organic India, Tata Tea, Teapigs, and Tetley.

Sales through e-commerce channels during the quarter grew 61%, the company said. Modern trade channels recorded a sales growth of 21%. The roll-out in food services and pharmacies are progressing as per Tata Consumer's plans, it said. While food services are now being sold across key large accoutns and premium hotel chains, distribution of pharmacy products has expanded to India's top 40 cities, the company added.

During the quarter, Tata Starbucks added six new stores on a net basis. The total number of stores now stands at 485 across 80 cities in India. "Same store sales growth (SSSG) was positive except during May when the regional geopolitical tensions flared up and impacted store operating hours in specific geographies," the company said.

SEGMENT PERFORMANCE

Tata Consumer's India business registered a revenue of INR 31.3 billion for the June quarter, up just over 11% on year. Revenue from its international business stood at INR 11.5 billion compared with INR 10.5 billion in the year-ago quarter. Combined revenue from branded business was INR 42.70 billion for the reporting quarter, up nearly 11% from INR 38.6 billion a year ago. Top line of non-branded business was INR 5.4 billion, up 7% on year.

Its India packaged beverages business segment reported a volume growth of 1%, which was broad-based and across brands and segments. Tata Consumer's salt business, part of its India foods semgent, saw a revenue growth of 13% and volume growth of 5%.

Its ready-to-drink category saw a volume growth of only 3% during the June quarter. The segment's revenue fell 13% due to trade price corrections taken last year, it said. Revenues of Capital Foods and Organic India grew 10% on year during the quarter under review and faced problems due to transitory issues. The two brands have a combined gross margin of 50%.

Tata Consumer incurred an overall expenditure of INR 43.6 billion during the June quarter, up nearly 11% on year. Of this, cost of materials consumed grew 21% on year to INR 20.4 billion. The company's consolidated operating margin stood at 9.76% for the June quarter, compared with 12.01% in the year-ago quarter.

The company disclosed its June quarter earnings after the markets hours. On Wednesday, its shares closed 2.1% lower on the National Stock Exchange at INR 1,062.60. End

Edited by Akul Nishant Akhoury

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