Tata Consumer Products Confident Of Margin Recovery After Q1 Earnings Miss
"This year, all forecasts point to a normal crop and therefore, tea prices may normalise. This could directly aid margins," Tata Consumer Products MD & CEO Sunil D'Souza told NDTV Profit.
Tata Consumer Products Ltd. remains confident of regaining lost margins after reporting a weak set of results for the first quarter of the financial year ending March 2026.
Speaking to NDTV Profit, TCPL's Managing Director & CEO, Sunil D'Souza revealed that the company hopes to reclaim margins once tea crop conditions normalise and coffee prices stablilise.
"Margins were negative largely on back of volatility in tea prices, which were not fully passed on to the consumer. Last year, tea prices went up because there were at least three droughts. We were able to pass on only 70% of that inflation," he told NDTV Profit.
"This year, forecasts point to a normal crop and, therefore, tea prices may normalise. This could directly aid margins," he added.
Tata Consumer Products reported its first quarter earnings in the fiscal year ending March 2026 on Wednesday, where consolidated net profit rose 15%, missing analyst estimates.
The FMCG company, known for its Tata Tea brand, reported a net profit of Rs 334 crore for the June quarter, according to an exchange filing. Analysts tracked by Bloomberg had estimated a profit of Rs 355 crore.
During the April-June period, Tata Consumer Products reported a margin of 12.7%, which fell short of analysts' estimate of 13.4%.
TCPL Q1 FY26 Highlights (Consolidated, YoY)
Revenue up 9.8% to Rs 4,779 crore versus Rs 4,352 crore (Bloomberg estimate: Rs 4,813 crore).
Ebitda down 9% to Rs 607 crore versus Rs 667 crore (Estimate: Rs 648 crore).
Margin narrows to 12.7% versus 15.3% (Bloomberg estimate: 13.4%).
Net profit up 15.1% to Rs 334 crore versus Rs 356 crore (Bloomberg estimate: Rs 355 crore).
D'Souza added that volatile coffee prices, too, impacted the company's margins.
However, going forward, TCPL expects margins to recover as coffee prices eventually stabilise. "As coffee prices settle, we expect margins to come back. We are confident of retaining market share in the coffee segment as well," he told NDTV Profit.
Shares of Tata Consumer Products are trading at Rs 3,705, which amounts to a fall of 0.6% compared to Wednesday's closing.
