Tata Consumer posts 36% net profit rise in Q2 | The Financial Express

Tata Consumer posts 36% net profit rise in Q2

The company’s revenue from operation improved 11% on year to Rs 3,363 crore as India’s business revenues grew 9% to Rs 2,160 crore and international business grew 7% on year to Rs 839 crore.

Tata Consumer posts 36% net profit rise in Q2
The company made a one-time gain of Rs 111 crore on the back of the sale of a land parcel.

Tata Consumer Products (TCPL) announced on Thursday that it has posted a 36% year-on-year (y-o-y) jump in consolidated net profit to Rs 355 crore for the quarter that ended September. The sharp increase in net profit was on the back of improved sales and a one-time gain made from the sale of a land parcel.

The company’s revenue from operation improved 11% on year to Rs 3,363 crore as India’s business revenues grew 9% to Rs 2,160 crore and international business grew 7% on year to Rs 839 crore.

The company made a one-time gain of Rs 111 crore on the back of the sale of a land parcel.

However, the company’s operating margin contracted 90 basis points (bps) to 13.0% during the quarter impacted by international business profitability, the company said. Waning benefits of lower tea prices and extremely high inflation in salt also could have led drop in the company’s consolidated profitability, analysts said.

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Inflation continues to weigh on demand in the international markets, even as India has been relatively more resilient, except for rural. In the international business, input cost inflation, adverse currency movement, and lag in pricing have impacted margins, we will be looking at pricing and structural cost-saving actions to mitigate that, the company said.

For India Business, beverages revenues declined 7% while volumes were also down 1% due to pricing corrections and category slowdown. The company gained volume market share in tea during the quarter by 46 bps but lost value market share by 20 bps due to price cuts taken during the quarter.

India’s foods business revenue grew 29% but volumes were flat during the quarter, the company said.

The company has improved its distribution channel to 1.4 million distributors at the end of September from 1.3 million at the end of March.

Tata Starbucks’ revenue for the quarter saw strong growth of 57%, led by normalized store operations and a revival in out-of-home consumption, the company said.

It opened 25 new stores during the quarter and now has over 300 stores across the country.

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First published on: 21-10-2022 at 02:30 IST