Tata Consumer Products Q1 profit dips 14%, revenue up 16%

Tata Consumer Products Limited (TCPL) on Tuesday posted a 14.3 per cent dip in its net profit for the June quarter at Rs 289 crore as against Rs 337.7 crore reported during the year ago period. The company, however, reported a 16 per cent increase in consolidated revenue, amounting to Rs 4,352 crore. The company highlighted significant strides across various business segments, driven by strategic acquisitions and robust organic growth. However, despite these gains, the company faced a 14 per cent decline in net profit, dropping to Rs 289 crore.

Key highlights

• Revenue Growth: The company achieved a 16 per cent year-on-year increase in consolidated revenue, with organic growth contributing 10 per cent. This was fueled by strong performance in the India Foods and International businesses.
• Profitability: Consolidated EBITDA surged by 23 per cent, with margins expanding by 80 basis points to 15.4 per cent. Despite this, the group net profit (before exceptional items) saw a decline of 14 per cent year-on-year, resulting in Rs 289 crore.

Segment performance

• India beverages: Revenue grew by 6 per cent, with flat tea volumes year-on-year. The Ready-to-Drink (RTD) segment faced challenges due to an intense summer, impacting demand.
• India foods: Continued its strong trajectory with a 30 per cent increase in revenue, driven by 10 per cent volume growth. The Salt segment saw a 9 per cent revenue rise, bolstered by value-added salts.
• International business: Recorded a 10 per cent revenue growth, with a 46 per cent increase in EBIT, supported by pricing strategies and cost-saving initiatives.
• Growth businesses: Achieved a 20 per cent organic growth despite the seasonal impact on the RTD business.

Acquisitions: The integration of Capital Foods and Organic India is progressing well. Capital Foods has completed the cleanup of channel inventory and is now trending as expected. Organic India is moving forward with its integration as per schedule.
Expansion: Tata Starbucks continues to grow, with 17 new stores opened in Q1, bringing the total to 438 stores. The company also launched new products like Tata Tea Chakra Vita Care in Tamil Nadu and introduced Tata Spring Alive and Himalayan Saffron in the RTD segment.

TCPL announced a rights issue to raise Rs 2,997.77 crore, expected to close on August 19, 2024. The proceeds will be used to repay short-term financing raised for recent acquisitions.