Tata Consumer Products Ltd on August 10 reported a 38 percent jump in consolidated profit after tax (PAT) at Rs 255 crore for the first quarter of the financial year 2022-23, up from Rs 185.2 crore in the year-ago period.
On a sequential basis, the profit increased 17.5 percent from Rs 217.5 crore in the January–March period.
The consolidated revenue of the Tata Group company rose 10.6 percent to Rs 3,327 crore from Rs 3,009 crore in the same period of the previous year. Sequentially, revenue was up 4.8 percent.
“We delivered double-digit revenue growth and improved profitability for the company despite a challenging macro environment and inflation impact in some of our categories," Managing Director and CEO Sunil D'Souza said.
The year-on-year growth was driven by an increase in revenue of its India tea business, domestic foods business, growth in subsidiaries and international coffee business, the company said.
Domestic business
The company reported market share gains in both its core categories—tea and salt—in India.
“Our new engines of growth—NourishCo, Tata Sampann, Tata Soulfull and Tata Q are making good progress and expanding their market presence, as we have significantly accelerated the pace of innovation with a number of new launches across categories aimed at expanding our portfolio and reaching new consumer segments”, D’Souza added.
The company gained market share in the branded tea segment in the domestic market, though its India Packaged Beverages business shrunk 4 percent on year due to the correction in tea prices effected by the company during the quarter. This was on a high base of last year when the company’s revenues had jumped 24 percent year on year.
The coffee business revenue jumped 73 percent on year, aided by a 43 percent increase in volume with new SKU launches and penetration in newer geographies.
India foods business revenue grew 19 percent on year compared to a growth of 20 percent in the business in the year-ago period.
The salt portfolio registered double-digit growth, with the premium salts segment gaining 36 percent on year.
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Tata Consumer Products recently entered alternate meat segment with the launch of Tata Simply Better-Plant Based Meat (PBM) range.
With this new brand, the company is targeting consumers who are looking to incorporate more plant-based ingredients for health, sustainability or other considerations.
NourishCo, which is focused on building brands in the healthy hydration space and has Himalayan mineral water, Tata Gluco Plus and Tata Water Plus in the portfolio, grew 110 percent on year, led by strong performance across products and geographies.
“We continued to see strong growth in alternate channels, with modern trade channel growing 35 percent YoY and ecommerce channel now accounting for 8.2 percent of India business sales, up from 2.5 percent in FY20,” the company said in its release.
Overseas operations
The company’s revenue from international business grew 9 percent on year, aided by market share gains by Tetley in the UK. Revenue in the US was driven by distribution expansion and targeted promotions for its Eight O’Clock Coffee.
The company’s cold brew range of Teapigs also generated robust numbers both in the UK and the US.
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Tata Starbucks
Revenues surged more than three-fold on a low base of the previous year. The company opened four new Starbucks stores in the quarter, taking its store count to 275 across 30 Indian cities.
Margins
Consolidated EBITDA (earnings before interest, tax, depreciation and amortisation) grew 14 percent on year to Rs 460 crore, with an EBITDA margin expansion of 40 bps to 13.8 percent.
“In terms of profitability, we delivered an EBITDA margin expansion YoY, despite severe inflationary pressures in the salt business and significantly higher A&P (advertising & promotion,” D’Souza said.
Tata Consumer Products closed Rs 1.85 higher on the National Stock Exchange at Rs 790.55 on August 10. The stock has been trading flat over the past year but has gained 4 percent in the past month.
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