Tata Consumer Products on Tuesday reported a consolidated net profit of Rs 290 crore (attributable to owners) for the June quarter, a drop of 8.3% year-on-year, missing Street estimates amid muted demand led by heatwaves and elections.
Bloomberg consensus estimates had pegged the net profit for the quarter at Rs 351 crore.
The owner of Tetley tea and Ching’s Secret noodles posted a 16.3% y-o-y rise in revenue to Rs 4,352 crore in the three months to June 30, in line with the Street estimates of Rs 4,310 crore. Earnings before interest tax depreciation and amortisation (Ebitda) for the quarter stood at Rs 667 crore, up 22.4% with a margin expansion of 70 basis points to 15.3% versus last year.
“In India, we continue to strengthen our sales and distribution infrastructure and have implemented split routes as announced earlier. This is expected to add about 35% additional feet on the street,” Sunil D’Souza, MD & CEO, Tata Consumer, said.
He also added that the company, in the health and wellness portfolio, was piloting go-to-market initiatives in the pharma and food service channels.
India Beverages, which includes Tata Tea, Organic India, Himalayan, grew 6% y-o-y with revenue for Q1 at Rs 1,523 crore. However, tea volumes remained flat compared with last year. Nourishco, the ready-to-drink business, recorded a revenue growth of 7% y-o-y.
India Foods saw a revenue of Rs 1,346 crore, a rise of 30% versus last year, and volume growth of 10%. This includes brands like Tata Salt, Tata Sampan, Chings Secret, Smith & Jones, Tata Soulfull and others. Salt revenue witnessed a growth of 9%, driven by strong volume growth. Premiumisation of the salt portfolio drew strong momentum and grew 35%.
The company said that Capital Foods and Organic India account for 29% of the India business.
International business, which includes Tetley, Eight O’Clock, Teapigs and Good Earth, recorded 10% revenue growth at `988 crore versus last year, with earnings before interest and tax growth at 46%, driven by pricing and cost-saving efforts.
Coffee continued its strong trajectory with a revenue growth of 28%. Tata Starbucks opened 17 net new stores during the quarter. The total store count stood at 438 at the end of Q1.
“We have completed the end-to-end integration of our recent acquisition Capital Foods and are on track to complete the integration of Organic India. Identified synergy benefits have started accruing in both businesses. Going forward, we will continue to execute against our strategic priorities and deliver consistent and profitable growth,” D’Souza said.
Shares of Tata Consumer closed 0.64% down on the BSE on Tuesday at Rs 1,193.85 apiece.