Tata Consumer Products Ltd, the owner of Tetley tea and Ching's Secret noodles brands, said its net profit was unchanged at Rs 359 crore.
Revenue increased 13 percent to Rs 4,214 crore in the three months ended September 30, as compared to the same period last year at Rs 3,734 crore, Tata Consumer said in an exchange filing on October 18.
The EBITDA margin for the quarter was at Rs 629 crore growing 11 percent, this was primarily led by higher input costs for the India tea business. EBITDA is short for earnings before interest, taxes, depreciation, and amortisation. One basis point is one-hundredth of a percentage point.
Tata Starbucks added 19 net new stores during the quarter and entered five new cities in Q2. The total store count is 457 as of September 2024 in 70 cities.
According to the company, erratic weather patterns have affected tea and salt production in India, leading to input cost inflation. Therefore India beverages had a soft quarter, revenue for the quarter declined 3 percent, with volume declining 4 percent owing to soft demand. Raw tea prices saw significant inflation during the quarter. Staggered price increases have been actioned across brands. Coffee continued its strong trajectory and grew 29 percent during the quarter.
"As a perspective, Tea costs have gone up by about 25 percent to 30 percent and we expect them to stay elevated for some time. While we have taken gradual deep price increases, we have not so far passed on the entire cost increase to the consumer," said Sunil D'Souza, Managing Director & Chief Executive Officer of Tata Consumer Products in the investor call following the Q2 results.
The global coffee category continues to face demand headwinds owing to record-high coffee prices.
India Foods recorded 28% revenue growth. The company to mitigate the input costs had announced a price increase of Rs 2 in Tata Salt, effective October, to mitigate input cost inflation. Salt revenue grew 2 percent with flat volumes during the quarter. Value-added salts continued their strong momentum and grew 26 percent, Rock salt registered record volumes.
"Price increase announced in Tata Salt to combat the input cost increase," said the company in its investor presentation.
"We have now corrected the pricing across the geographies. We are competitive now, and therefore I would expect us to be coming back to our normative 25 to 30% growth very soon," said D'Souza.
International business recorded 7 percent revenue growth.
Continue to build momentum in the new businesses of Capital Foods and Organic India. "The newly acquired growth businesses of Capital Foods and Organic India continue to deliver improving quarterly run-rates with strong EBITDA expansion YoY. Capital Foods revenue grew 25% QoQ and Organic India revenue grew 45% QoQ," as per the Q2 investor presentation.
On October 18, Tata Consumer's shares on BSE closed trading 0.63% higher at Rs 1,097 apiece.
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