Tata Consumer Q2 Profit Rises to Rs 470 Cr, Revenue Up 14% Led by India Business

New Delhi: Tata Consumer Products Ltd (TCPL) on Monday reported a 15.65 per cent year-on-year increase in consolidated net profit to Rs 470.14 crore in the September quarter, led by volume growth in domestic business, improved margins, price increases and effective input cost management.

The company had posted a net profit of Rs 406.51 crore in the July-September period a year ago, the Tata Group’s FMCG arm said in a regulatory filing.

Its revenue from operations rose by 14 per cent to Rs 5,661.13 crore in the second quarter of FY27, compared to Rs 4,965.9 crore in the year-ago period.

The revenue growth was primarily driven by strong volume growth in domestic markets, healthy performance across Growth businesses, and sustained execution across product categories, said TCPL Group CFO Ashish Goenka.

TCPL’s profit growth was supported by improved operating margins, calibrated price increases and effective management of input-cost inflation, Goenka told PTI.

“We have a strong topline growth along with margin expansion and I think profitability is going ahead of the topline. So, all in all, it’s a very balanced quarter,” said Goenka.

During the quarter, TCPL implemented calibrated price hikes across categories to offset inflation in tea, salt, freight and fuel costs. The benefits of recent increases are expected to flow through in subsequent quarters.

Goenka also said that pricing contributed approximately 5.5 to 6 per cent to double-digit revenue growth in India business in the September quarter.

“In India (business) if you see 17 per cent value growth and 11 per cent is UVG (Underlying Volume Growth), so (contribution of ) price is about 5.5 to 6 per cent,” he said, adding “a lot of it (growth) was largely volume-led because the pricing interventions have just gone in”.

Goenka further said e-commerce and quick commerce together accounted for 24 per cent of domestic sales during Q2 FY27.

Moreover, in segments such as salt, it raised prices by Rs 2 in June and implemented another increase in October, and its “benefit should flow into next quarter”.

Total expenses of TCPL in the September quarter stood at Rs 5,067.42 crore, up 13 per cent from the same period a year ago.

In Q2 FY27, TCPL’s overall branded business rose to Rs 5,036.29 crore, up 14.2 per cent YoY from Rs 4,409.86 crore in the corresponding quarter of the preceding fiscal.

TCPL’s branded businesses include tea, coffee, water and various other value-added products.

Similarly, its revenue from non-branded business was up 11.62 per cent at Rs 658.77 crore during the second quarter of FY27.

This segment includes plantation and extraction of tea and coffee.

In the branded segment, TCPL’s revenue from the India business was up 17.42 per cent to Rs 3,666.13 crore in the period under review.

The Growth businesses of TCPL grew 40 per cent and scaled to 38 per cent of the India business. This is “the third consecutive quarter of very good growth on the growth portfolio”, said Goenka.

During the quarter, TCPL’s salt revenue grew 15 per cent, supported by robust volume growth.

“India tea volumes were flat amid subdued category demand; revenue declined marginally as the volume-value gap narrowed following pricing actions,” it added.

The company’s Sampann brand continued strong momentum, recording 57 per cent revenue growth during the quarter, driven by a robust rise in volume.

In the portfolio, “the cold press oil and the dry fruits that we launched 2 years back are already at a 1000 crore ARR”, he said.

Its ready-to-drink (RTD) business also delivered strong performance, with revenue rising 47 per cent, supported by distribution expansion, premiumisation and a strong innovation pipeline.

The combined revenue of Capital Foods and Organic India, which TCPL had acquired in January 2024, grew 15 per cent during the quarter in the export business, despite shipping disruptions. However, their domestic revenue registered a stronger growth of 24 per cent, it added.

TCPL’s revenue from the international market was up 6.4 per cent to Rs 1,370.16 crore, compared to Rs 1,287.71 crore in the corresponding quarter a year ago.

The low growth in the segment was due to “lapping a high base”, it said.

In the UK market, the tea category consumption was impacted by a prolonged heatwave, although the Tetley brand outperformed the overall category. In Canada, the company’s business growth in both regular and speciality tea segments remained ahead of the category.

Tata Starbucks, a 50:50 joint venture between TCPL and Starbucks Corporation, “recorded a multi-quarter high” same-store sales growth in the quarter under review.

“Revenue for the quarter grew 15 per cent, a multi-quarter high backed by strong same-store sales growth,” it said, adding “during the quarter, seven net new stores were opened including two Reserve stores, further strengthening the premium portfolio”.

The JV was operating 505 Starbucks stores in 81 cities across India by the end of the September quarter.

Commenting on the result, Managing Director and CEO Sunil D’Souza said, “We delivered our second consecutive quarter of double-digit revenue growth in FY27, backed by strong underlying volume growth in India business. This volume-led performance, together with disciplined execution, drove 18 per cent Ebitda growth.”

Total consolidated income of TCPL, which includes other income, was up 13.9 per cent to Rs 5,699.7 crore in the September quarter.

Shares of Tata Consumer Products Ltd settled at Rs 936.60 apiece, down 2.44 per cent, on the BSE on Monday.

(Disclaimer: Except for the headline, this article has not been edited by HDFC Sky editorial team and is auto-generated from PTI feed.)