Tata consumer products. (Representative image)
Tata Consumer Products Limited, a Tata Group company and one of the top FMCG players in the country, has reported a consolidated profit after tax of Rs 286 crore for the quarter ended September 2021, an increase of 43 percent from Rs 200 crore in previous quarter and a rise of 5 percent from Rs 273 crore reported a year earlier.
Consolidated revenue came in higher by one percent at Rs 3,033 crore for the quarter, compared to Rs 3,008 crore in June 2021 quarter and by 9 percent compared to Rs 2,781 crore reported a year earlier.
On a QoQ basis, the performance of all business segments was flat while on a YoY basis, the Indian foods business grew by 23 percent, Indian Beverages business witnessed a growth of 14 percent while the International business declined by 4 percent. The non-branded business also declined by 3 percent on a YoY basis.
The India Packaged Beverages business recorded a 10 percent revenue growth, on an elevated base last year. The company is focused on its hyper-local strategy and is launching strategic campaigns and products targeting a specific area.
Commenting on the beverages business, Sunil D’Souza, Managing Director & CEO, said, “While the worst of tea inflation seems to be behind us, we are now seeing inflationary trends in packaging and freight costs. We will address these by further strengthening operating efficiencies and driving net revenue management.”
Tata Salt and Tata Sampann continue to witness strong revenue growth despite the high base of last year.
E-commerce continues to play an important role in generating sales, contributing 7 percent to domestic sales revenue and recorded 39 percent growth YoY. The institutional channel recorded significant growth of 117 percent on a YoY basis.
On the international front, Tetley and Teapigs (super premium tea brand) continue to gain market share and add new customers.
The company’s three brands -- Teapigs, Tetley and Good Earth -- won laurels at the ‘Great Tastes Awards’.
Tata Starbucks witnessed a revenue growth of 128 percent in Q2 albeit on a low base of last year that was impacted by reduced mobility. Revenue grew 23 percent when indexed to the same period in FY20. Easing of lockdown restrictions is leading to growth across store formats, with high street and highway stores seeing the fastest recovery. The company opened 14 new stores during Q2 and entered one new city, Jaipur, in its network for Starbucks.
“We delivered another quarter of double-digit revenue growth despite a high base last year. Our India business performed well, both our Beverages and Foods businesses recorded strong revenue growth with both tea and salt seeing market share gains,” D’Souza commented.
He further added that the company continues to expand its distribution reach across channels while investing behind its brands. Innovation remains a focus area for the company which will further accelerate its pace going forward.
EBITDA for the company grew by 5 percent to Rs 420 crore and EBITDA margins on a YOY basis were flat at 14 percent for the quarter.
The benefits of lower raw material and employee costs as a percentage of sales were negated by higher marketing spends and other expenses.
Net margin at 9 percent were also flat for the company on a YOY basis.
“Going forward, we will stay focused on driving growth in our core businesses while adding new levers of growth. We will continue to progress our transformation agenda while delivering profitable and sustainable growth,” D’Souza stated.
The stock closed at Rs 795.25 today, down Rs 19.55 (2.4 percent) from its previous day’s close. It has generated returns of 70 percent over the past one year, 35 percent in this financial year, 4 percent during the last three months and -7 percent in the past one month.
