Tata Consumer Q4 Results: Profit Beats Estimates; Margin Contracts On Higher Tea Costs

Tata Consumer Products Ltd.'s profit for the three months ended March surpassed analysts estimates, aided by a low base and exceptional gains during the period, while its margins were impacted by higher tea costs.

The company's bottom line grew 59% during the January-March period on a yearly basis to Rs 344.85 crore, according to its notification to the exchanges on Wednesday. Analysts tracked by Bloomberg had pegged the profit at Rs 225 crore. The fourth quarter included exceptional gains of Rs 45.32 crore, compared to an exceptional loss of Rs 215.80 crore a year ago.

The exceptional gain of Rs 45.32 crore in the quarter included fair value gains of Rs 120 crore on remeasurement of contingent consideration, partially offset by an asset write-down of Rs 72 crore and restructuring costs of Rs 3 crore. In the same quarter last year, the company had recorded an exceptional loss of Rs 215.80 crore, which included an asset write-down of Rs 62 crore and a fair value loss of Rs 53 crore on financial instruments.

The Tetly Tea owner reported underlying volume growth of 5.9% in its India branded business, excluding acquisitions, for the fourth quarter.

Tata Consumer Products Q4 Results (Consolidated, YoY)

• Revenue up 17.3% to Rs 4,608.22 crore versus Rs 3,926.94 crore (Bloomberg estimate: Rs 4,556 crore).

• Ebitda down 1% to Rs 620.95 crore versus Rs 629.30 crore

  (Bloomberg estimate: Rs 612 crore).

• Margin at 13.5% versus 16.0% (Bloomberg estimate: 13.43%).

• Net profit up 59% to Rs 344.85 crore versus Rs 216.63 crore (Bloomberg estimate: Rs 225 crore).

Other Key Q4 Highlights

• India beverages business recorded 17% revenue growth in the fourth quarter, including 9% organic growth.

• Excluding Organic India, India beverages revenue rose 9% during the quarter.

• The international business reported 2% in constant currency.

• Tata Starbucks joint venture added six new stores, taking the total store count to 479.

• FY25 revenue rose 5%. Growth improved sequentially, with 7%

  growth in H2 FY25 versus 3% in H1 FY25.

The company reported an 18.4% year-on-year increase in revenue from its India business to Rs 2,936.72 crore. Revenue from the international business rose to Rs 1,052.49 crore from Rs 1,193.68 crore clocked in the year-ago period.

Excluding acquisitions, revenue grew by 12% year-on-year, or 11% in constant currency terms, the company said, adding that it was driven by a 13% increase in the India business, 2% growth in the international business, and a 23% rise in the non-branded business.

Analysts had expected stable revenue trends for FMCG companies in the March quarter, with rural demand gradually recovering and urban demand remaining sluggish.

Operating performance in India was affected by higher tea costs, which were partly offset by improvements in the international and non-branded segments, the company said. The raw material cost surged by 17% year on year.

Ahead of the results announcement, shares of Tata Consumer closed 1.18% higher on Wednesday at Rs 1,150.10 apiece, against a 0.67% advance in the benchmark index Nifty 50 at closing. The scrip rose as much as 1.75% during the day and has risen 25.74% on a year-to-date basis.