About the company:
Tata Consumer Products Limited (TCPL) is an Indian multinational consumer goods company and a subsidiary of the Tata Group. It operates in the food and beverage sector, offering products such as tea, coffee, water, salt, pulses, spices, and packaged foods. TCPL owns popular brands like Tata Tea, Tetley, Tata Coffee, Tata Salt, and Himalayan Water. The company has a strong presence in India and international markets, focusing on innovation, sustainability, and consumer wellness.
Challenges and Market Trends:
Tea Price Inflation: Prices up 25-30% YoY, putting pressure on margins.
Coffee Prices: At 40-50 year highs, impacting costs.
Competitive Pricing in Tea: The company has taken price hikes covering about 40% of the cost increase but remains cautious of competition.
Ready-to-Drink (RTD) Business:
Improved volume growth (39% in December).
Price adjustments were made to remain competitive.
International Business: UK and Canada delivered strong performance; the US showed signs of improvement.
Strategic Focus:
Strengthening Core & Growth Businesses: Including Sampann, Soulfull, Capital Foods, and Organic India.
Execution & Cost Optimization: Focused on increasing direct reach, expanding rural distribution, and leveraging analytics.
Innovation: New product launches like Tetley powder, Ready-to-Drink coffee, Jelly variants, Quick Cook Kabuli Chana, and expanded dry fruits and cold-pressed oils categories.
E-commerce & Modern Trade: E-commerce grew by 59% and now contributes 15% of total sales, surpassing modern trade.
Outlook:
Tea Margin Pressure: Expected to ease from Q2 FY’26 with potential price hikes or cost reductions.
RTD Business: Expected to return to revenue growth after pricing corrections.
Capital Foods & Organic India: Stabilized and expected to accelerate growth in Q4 with expansion into pharma and food service channels.
Tata Starbucks: Continued expansion, now in 74 cities with 473 stores.
Here is the consolidated Profit and Loss (P&L) statement for Tata Consumer Products Limited for the quarters ending June 2024, September 2024, and December 2024:
| Particulars | Jun-2024 | Sep-2024 | Dec-2024 |
|---|---|---|---|
| Revenue from Operations (₹ Crores) | 4,352.07 | 4,214.00 | 4,444.00 |
| EBITDA (₹ Crores) | 689.45 | 629.00 | 578.00 |
| Net Profit (₹ Crores) | 314.15 | 364.00 | 282.00 |
| EBITDA Margin (%) | 15.84 | 14.93 | 13.01 |
| Net Profit Margin (%) | 7.21 | 8.64 | 6.35 |
Note: The data for June 2024 is sourced from India Infoline, while the data for September 2024 and December 2024 is from Tata Consumer Products’ official press releases.
Recent updates:
Highlights from last concall:
Here are the key takeaways from Tata Consumer Products Limited’s Q3 FY’25 earnings call:
Financial performance:
Revenue Growth: 17% YoY growth in consolidated revenue; 9% organic growth.
Segment Growth:
India Beverages: 16% growth (9% organic, tea volume up 7%). India Foods: 31% growth (11% organic).
International Business: 8% revenue growth (4% constant currency), with a strong 35% YoY increase in profitability.
Non-Branded Business: 9% revenue growth.
EBITDA: Flat YoY, impacted by tea price pressures.
Profit Before Tax: Declined by 20%, primarily due to tea price hikes.
Net Profit: INR 287 crores.
Cash Reserves: INR 880 crores post rights issue.