Tata Consumer Products Q1 Results: Net profit drops 14% to ₹289 crore, revenue rises 16% YoY

Tata Consumer Products Q1 Results: Tata Consumer Products announced its April-June quarter results for fiscal 2023-24 (Q4FY24) on Tuesday, July 30, reporting a drop of 14.3 per cent in its net profit at ₹289.3 crore, compared to ₹337.7 crore in the corresponding period last year. The Tata Group-company's revenue from operations in the first quarter of the fiscal rose 16.3 per cent to ₹4,352 crore crore, compared to ₹3,741.2 crore in the year-ago period.

On an operational basis, the Tetley Tea maker's EBITDA (earnings before interest, taxes, depreciation, and amortization) for the April- June quarter rose 22.5 per cent to ₹667.4 crore, compared to ₹545 crore in the same period last year. The EBIT margin rose to 15.3 per cent, up 70 basis points in the June quarter, compared to 14.6 per cent in the year-ago period. 

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Tata Consumer Products Q1 Results - Key Metrics

Tata Consumer Products was hurt by a nearly 81 per cent surge in finance and amortisation charges, taking its total expenses up by 19 per cent to ₹3,926 crore. Additionally, tea prices rose 16 per cent during the quarter in North India, while coffee prices rose around 57 per cent, pushing up the cost of raw materials consumed by 15 per cent.

However, the company's revenue from operations in the June quarter grew the fastest in thirteen quarters, owing to a nine per cent rise in its salt business. Additionally, the Tata Group company's 'growth business'—which houses the Tata Sampann pulses and acquisitions made in the previous quarter—recorded a 20 per cent organic rise in revenue.

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The company's profit before exceptional items and tax, at ₹465 crore, is six per cent lower as an improvement in operating performance was more than offset by finance costs and amortisation charges. The group net profit was lower because of higher exceptional items and a lower share of profits from Associates and Joint Ventures.

Total expenses of Tata Consumer Products - earlier known as Tata Global Beverages Limited (TGBL) - stood at ₹3,926.29 crore, up 18.82 per cent in the June quarter. The company had a cost of ₹17 crore as an exceptional item related to business restructuring and organisation.

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In the June quarter, the overall branded business was up 14.5 per cent to ₹3,861.51 crore. It was at ₹3,372.75 crore in the corresponding quarter last fiscal. The branded businesses include tea, coffee, water and other various value-added businesses. The revenue from the branded business in India was up 13.6 per cent to ₹2,815.12 crore in the June quarter.

The contribution of Tata Consumer Product's international business was up 17 per cent to ₹1,046.4 crore. While, its revenue from non-branded business was at ₹500.58 crore, up 32.76 per cent during the quarter. This segment includes plantation and extraction business of tea and coffee. The total income, which includes other income was up 15.6 per cent to ₹4,391.24 crore in the June quarter.

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Sunil D’Souza, Managing Director & CEO of Tata Consumer Products, said, “We delivered good topline growth of 16 per cent in Q1 FY25 (+10 per cent organic growth)…During the quarter, we recorded strong growth in the India salt business. India tea business was impacted by an intense summer. Our growth businesses (Tata Sampann, RTD, Tata Soulfull, Tata SmartFoodz, Capital Foods, Organic India) recorded 66 per cent growth (20 per cent organic growth).''

 ‘’We delivered a strong performance in our international markets and significant margin expansion, led by structural interventions and pricing actions. In India, we continue to strengthen our sales & distribution infrastructure and have implemented split routes as announced earlier, this is expected to add about 35 per cent additional feet on street,'' said D'Souza.

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‘’Channels of the future (modern trade and e-commerce) continue to contribute strongly to our growth algorithm. In addition, we are piloting our go-to-market in the pharma channel (for our health and wellness portfolio) and the food service channel,'' he added. 

Tata Starbucks - a 50:50 joint venture between Tata Consumer Products and Starbucks Corporation - added 17 net new stores during the quarter and entered four new cities. This brings the total number of stores to 438 across 65 cities. In the January-March quarter of FY24, the company acquired Capital Foods, the owner of Ching's Secret and Smith & Jones, and Organic India, which makes tea and herbal supplements.

Tata Consumer Products' key beverage brands include Tata Tea, Tetley, Organic India, Eight O’Clock Coffee, Tata Coffee Grand, Himalayan Natural Mineral Water, Tata Copper+, and Tata Gluco+. Its food portfolio includes brands such as Tata Salt, Tata Sampann, Tata Soulfull, Ching’s Secret, and Smith & Jones. The company has a consolidated annual turnover of ₹15,206 crore and operates in India and international markets.