Tata Consumer Products (TCPL) on Wednesday posted a net profit of Rs 277 crore in the April-June quarter, up 38% year-on-year (y-o-y), on the back of improved sales and margin.
The company’s revenue from operations rose 11% on year to Rs 3,327 crore as its India revenue grew 9% and international business sales increased 8% y-o-y. Its non-branded business grew 25% on year.
Operating margins of Tata’s FMCG arm were up 40 basis points (bps) from last year as gross margin improved due to tapering of tea cost in India but partly offset by input cost inflation in salt. Overall, the total expenses were higher during the quarter by 10% on year to Rs 2,959 crore. The company also spent 34% higher on advertisements during the quarter.
TCPL had higher investment behind brands and new businesses and higher exceptional costs. In a regulatory filing, the company said it has incurred an exceptional cost of Rs 23 crore related to business restructure and reorganisation.
The company also said that broad-based inflation continues to be a challenge across markets. Given the inflationary environment and investments required for some of the new businesses, it will continue to optimise margins at the TPCL level while remaining focused on growth. Its new engines of growth are NourishCo, Tata Sampann, Tata Soulfull and Tata Q.
For April-June, India packaged beverages business, revenue for the quarter declined 4% on year because of a correction in prices of tea but volumes grew 1% on year. Market share in the segment improved by 40 bps. While in the foods business, volumes declined 3% but revenues grew 19% on year. Market share improved by 400 bps in the segment.
Tata Starbucks saw revenue growth of 238% on a low base led by normalised store operations with lower restrictions. The company opened seven new stores during Q1 and entered four new cities — Jalandhar, Anand, Nagpur, and Calicut — bringing a total number of stores to 275 across 30 cities.