India’s Tata Consumer misses profit view as domestic beverages drag

INDIA’S Tata Consumer Products on Tuesday (Apr 25) reported a slightly smaller-than-expected rise in fourth-quarter profit as price hikes failed to offset tepid revenue growth in its domestic beverage business.

The company, which owns the eponymous Tata Tea and Tata Salt brands, said its consolidated net profit rose 23 per cent to 2.69 billion rupees (S$43.9 million) in the quarter ended Mar 31.

Analysts on an average expected a profit of 2.70 billion rupees, according to Refinitiv IBES data.

The company’s consolidated revenue climbed nearly 14 per cent to 36.19 billion rupees, led largely by a 15 per cent rise in its India business, beating analysts’ view of 35.11 billion rupees.

However, the share of the India business fell to 62 per cent of revenue from 70 per cent, as domestic beverages grew a weak 8 per cent and tea volumes grew a bare 3 per cent consecutively.

The company, which packages spices, pulses and cereals under the Tata Sampann brand, said cost of raw materials grew 11.4 per cent to 13.38 billion rupees.

Tata Consumer Products is among the first consumer goods firms to report results. Earlier in the day, Maggi noodles producer Nestle India reported a near-25 per cent jump in quarterly profit.

Quarterly revenue from Tata’s joint venture with Starbucks Corp in India mounted 48 per cent, while the international business that sells brands like Tetley Tea in the United Kingdom and Eight O’Clock coffee in the US, rose 10.5 per cent.

“We have seen a sequential improvement in international business margins and expect it to normalise by Q1FY24 (the current quarter),” the company said.

Last week, its unit Tata Coffee reported a near-20 per cent increase in quarterly profit.

Shares of Tata Consumer have fallen 4.24 per cent so far this year. REUTERS