India’s Tata Consumer beats first-quarter profit view on branded business

BENGALURU: India’s Tata Consumer Products reported a slightly better-than-expected quarterly profit on Friday, helped by double-digit volume growth in its India branded business.

Consolidated net profit rose 27.84percent year-on-year to 4.27 billion rupees (USD44.22 million) in the three months ended June 30, above analysts’ estimate of 4.20 billion rupees, per data compiled by LSEG. The company said its India branded business, which includes tea, coffee, salt and packaged foods, as well as newer brands from Capital Foods and Organic India, posted 13percent underlying volume growth. The results come as demand for consumer staples in India improves, helped by an extended summer and resilient rural consumption, although higher commodity and packaging costs continue to weigh on margins across the sector. Nestle India earlier reported higher profit supported by double-digit growth across its packaged brands, including Maggi noodles. Analysts had expected Tata Consumer to benefit from strong demand for beverages and packaged foods, while watching the impact of tea and coffee prices on margins.

Total revenue for the company, known for brands such as Tata Tea and Himalayan mineral water, rose about 12percent to 53.49 billion rupees, marginally missing analysts’ estimate of 53.83 billion rupees, per data compiled LSEG.

Revenue from its salt business rose 7percent on steady volumes, while those at its coffee division climbed 24percent. Tea revenue declined as the company passed on lower tea costs to consumers, it said. Consolidated EBITDA rose 19percent in the quarter, while EBITDA margin expanded 70 basis points year-on-year to 13.6percent.