Tata Consumer Products Q3: Profit slumps 17% despite revenue growth

8 Feb 2024 , 11:54 AM

Due to decreased contributions from associate and joint venture enterprises, Tata Consumer Products Ltd. (TCPL) reported a 17.26% decrease in its consolidated net profit to ₹301.51 Crore for the December quarter on Wednesday.

Compared to ₹403.75 Crore in the same quarter last year, the Tata Group FMCG arm’s consolidated profit before exceptional items and tax increased by 27.12% to ₹513.27 Crore in the October–December period.

As to the company’s regulatory filing, the FMCG division of the Tata Group had a consolidated net profit of ₹364.43 Crore during the December quarter of the previous year.

‘Group Consolidated Net Profit at ₹302 Crore is lower mainly on account of exceptional items and lower share of profits from Associate and Joint Ventures,’ stated TCPL.

Compared to ₹3,474.55 Crore in the same period last year, its operating revenue increased by 9.47% to ₹3,803.92 Crore in the current quarter.

During the December quarter, the overall expenses of the TCPL, which was formerly known as Tata Global Beverages Limited (TGBL), increased by 7.38% to ₹3,350.24 Crore.

‘For the quarter, revenue from operations increased by 9% (8% in constant currency) as compared to the corresponding quarter of the previous year, mainly driven by strong performance in India business, which grew 10%, 6% in International Business and 4% in Non-Branded Business,’ stated the company.

TCPL’s revenue from Indian branded business saw a 9.67% increase from ₹2,165.34 Crore to ₹2,374.93 Crore in the previous year.

The packaged beverages division of TCPL in India saw a 4% increase in revenue during the December quarter, while the coffee segment saw a 32% increase in revenue.

Its India Foods division expanded by 13% as well. The Tata Sampann portfolio of TCPL saw a strong 40% growth throughout the quarter.

‘We saw good results from our earlier actions in our India tea business, which resulted to a fourth consecutive quarter of volume-based growth. ‘In both tea and salt, we saw premiumisation at play with the premium portfolio in tea and the value-added salt portfolio recording good growth,’ the company’s managing director and CEO, Sunil D’Souza, said. ‘We continued to see volume-led growth in salt and recorded the highest-ever quarterly volume market share in salt.’

In a similar vein, TCPL’s foreign market income increased by 10.58 percent to ₹1,028.38 Crore. During the December quarter of FY23, it was ₹929.93 Crore.

‘Teapigs and Good Earth kept up their impressive expansion in the UK. ‘We are happy that our millet-based muesli launch has gained momentum,’ TCPL stated, noting that Good Earth and Teapigs are outpacing category growth rates in the US.

The total revenue generated by TCPL’s branded business climbed by 9.95 percent to ₹3,403.31 Crore during the quarter. It was 3,095.27 Crore in the same period last year.

Tea, coffee, water, and other diverse value-added companies are among TCPL’s branded businesses.

In the December quarter of FY24, its income from non-branded business—which includes plantation sales of tea and coffee—was ₹410.56 Crore, an increase of 4.92%.

The December quarter saw a 9.65% increase in TCPL’s total revenue to ₹3,863.51 Crore.

Tata Starbucks, a 50:50 joint venture between Starbucks Corporation and Tata Consumer Products Ltd, opened six new cities and added 22 net new outlets in the quarter. As a result, there are now 392 stores spread over 55 cities.

TCPL said during the quarter that it has acquired Capital Foods and Organic India, with an enterprise value of ₹7,000 Crore.

‘Capital Foods integration is already underway. According to our execution-focused approach, significant front-end progress has been made, and work on the back end, support functions, process, and organizational structure will shortly begin. We want to finish this in 100 days,’ it stated.

On Wednesday, the closing price of Tata Consumer Products Ltd.’s shares on the BSE was ₹1,166.15, an increase of 0.29% from the previous close.

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