June 25, 2012 / 17:23 IST
Moneycontrol Bureau
Tata Global Beverages Jan-March consolidated net profit declined 36% year-on-year to Rs 54 crore due to exceptional losses in the last quarter, compared with one-time gains a year ago.
Its profit before exceptional items rose 38% to Rs 167 crore in fourth quarter.
Tata Global Beverages' quarterly consolidated net sales were up 11% to Rs 1724 crore.
"Profit has gone up because of strong performance in Indian market and cost reduction initiatives," said L K Krishnakumar, CFO.
During the quarter, the company had exceptional loss of Rs 40 crore, while it had a gain of Rs 56 crore in the year ago quarter, mainly due to a profit on sale of non-core investment.
For the full year, its consolidated net profit rose 40% to Rs 356 crore, while sales were up 10% to Rs 6,631 crore.
Tata Global Beverages has maintained leadership in the domestic tea market, with a volume market share of 19.6% and value share of 21.3% as of March-end, said MD Percy Siganporia, citing AC Nielsen figures.
It has also maintained its share in UK in the black tea segment, although the segment as such declined 3% last year.
The company also saw good growth in Canada and has close to 50% market share in black tea there, Siganporia said.
However, its margins in US were hit due to very volatile coffee commodity prices over last year. Global coffee prices spiked over 300% through the year, only to fall back some what towards the end.
RURAL PENETRATION
Tata Global Beverages is betting big on high margin and innovative brands to drive growth in its developed markets. For instance, it has launched a combination of green and black tea in some markets and in UK a super premium brand Tea Pigs is growing at a compounded rate of over 35%.
In India though, it is focussing on rural penetration to boost growth. It has a scheme called 'Gaon Chalo' which it has expanded to 8 states last year.
"This is a self employment scheme for women in villages. Under this scheme over 70,000 sales personnel are going door to door selling our products," Siganporia said.
This scheme is boosting its tea sales in the country.
STARBUCKS ON TRACK
Tata Global Beverages entered into a joint venture with world's largest coffee retailer Starbucks to open outlets in India. Siganporia said those plans are on track.
It has plans to open its first outlet by August and 50 by end of the year.
Competition is heating up in the segment, with Jubilant Foodworks opening the first Dunkin' Donuts outlet in Delhi reecently. Siganporia said Tata-Starbucks will stick to its plans announced earlier.
Tata Global Beverages shares closed nearly at Rs 108 on Wednesday, up more than 1%.
Nachiket Kelkar
nachiket.kelkar@network18online.com 
