Tata Consumer Q4 FY24 earnings are set to beat the consumer sector blues, with industry-leading revenue growth in mid-single digit and robust margin expansion resulting in an even faster profit growth.
The Tata group’s consumer staples firm will report its fiscal fourth quarter and full year earnings on April 23. Analysts expect the revenue growth to be the highest among industry peers, helped by beverage sales, rising volumes in salt, and acquisition of Capital Foods, owner of Ching's Secret brand.
Tata Consumer revenue will grow by 4.8 percent on-year to Rs 3,989 crore, an average of six brokerage polls by Moneycontrol shows. The growth in bottom line is likely to be around 13.4 percent higher on-year at Rs 329 crore.
The EBITDA margin is likely to expand 100 basis points on-year, supported by benign tea costs and stable salt cost. EBITDA is short for earnings before interest, taxes, depreciation, and amortisation. One basis point in one-hundredth of a percentage point.
Over the past six months, the Tata Consumer Products stock has risen around 33 percent against a 15 percent rise in the benchmark Nifty during the period.
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The Tata group company is expected to deliver a better 5-year volume CAGR than other players. The firm’s gross margins might see a steady improvement as a result of its healthy growth and market penetration of its international business, analysts said.
Nuvama Institutional Equities said Tata Consumer’s growth will continue its strong trajectory. Capital Foods will contribute to the topline for around two months in Q4, the brokerage said.
The consumer staples sector is likely to clock a subdued revenue growth in the March quarter on muted demand environment. The rural demand continued to languish, dragging volumes. Low farm income and the rise of unorganised competitors are also hurting larger companies' sales.
Yet, the industry, including Tata Consumer, will see low to mid-single digit growth, instead of a fall in volumes, as a result of price cuts and increases in grammage, analysts have said.
Gross margins across the FMCG universe will see a small increase. Consumer companies have increased their share of advertisements and promotion spends to bolster brand image and market share over the past few quarters.
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