Tata Consumer Products Ltd (TCPL), previously known as Tata Global Beverages Ltd, reported a 21.12% surge in consolidated net profit to INR 289.56 crore for the quarter ending on March 31, 2023. As per a BSE filing, the growth was driven by a combination of volume and price increases in the company’s India business. In comparison, TCPL had recorded a net profit of INR 239.05 crore in the same quarter of the previous year.
During the quarter under review, its revenue from operations increased by 13.96% to INR 3,618.73 crore, compared to INR 3,175.41 crore in the corresponding period of the previous fiscal year.
“It was a very strong quarter with a significant improvement in the growth trends from the earlier quarter,” TCPL CFO L Krishnakumar told PTI.
The growth was led by the India business, which was up 15 per cent, which included every component of the business, including tea, coffee, and food and its growth portfolio, which consists of its business under Sampann, Soulfull and water, he added.
In Q4/FY 2022-23, the Tata Group’s FMCG division experienced a 14.11% increase in total expenses, which rose to INR 3,217.58 crore from INR 2,819.60 crore in the corresponding period, as stated by the speaker.
“For the quarter, revenue from operations increased by 14 per cent as compared to the corresponding quarter of the previous year, mainly driven by underlying growth of 15 per cent in India business, 6 per cent in international business, and 9 per cent in non-branded business,” said TCPL in its earnings statement.
As per Krishnakumar’s statement, commodity inflation remains high, with coffee and salt prices still being elevated despite a slight decrease in tea prices.
“It (commodity inflation) has come down a bit but we have also taken a price increase in the quarter and there are some recovery in volume. This year’s EBITDA margins were similar to the last year. Compared to earlier quarters, when the growth was entirely pricing led, this quarter we see a fair amount of volume growth in addition to price growth, especially in the Indian market.”
During the March quarter, TCPL’s branded business witnessed a 13.59% increase, amounting to INR 3,230.54 crore in comparison to INR 2,843.85 crore in the corresponding period of the previous fiscal year.
TCPL’s portfolio of branded businesses comprises of tea, coffee, water, and various other value-added products.
The revenue generated by TCPL’s branded business in the Indian market rose by 14.98% to reach INR 2,246.49 crore in Q4/FY22, compared to INR 1,953.66 crore in the same period.
“For the quarter, the India packaged beverages business delivered 1 per cent revenue growth and 3 per cent volume growth, recording a sequential recovery,” it said.
The trend of premiumisation persisted in the tea sector, leading to a better performance of the premium tea portfolio compared to the mass economy segment. Furthermore, the revenue growth of coffee remained robust, with a year-on-year increase of 31 percent.
“For the quarter, the India foods business delivered 26 per cent revenue growth and 8 per cent volume growth, bringing to close a strong year for the foods business when revenue grew 26 per cent,” it added.
TCPL’s food brand Tata Sampann “recorded double-digit revenue growth for the quarter and also for the year. The growth was led by broad-based performance across categories”, it said.
The international arm of TCPL contributed INR 984.05 crore to the branded business, reflecting a growth of 10.54 percent as compared to the corresponding quarter.
TCPL’s non-branded business, primarily comprising the plantation and extraction of tea, coffee and other produce, generated a revenue of INR 385.27 crore, marking a growth of 11.78 percent from the previous quarter of FY22 when it was INR 344.64 crore.
TCPL Managing Director & CEO Sunil D’Souza said, “During the quarter, we saw early signs of green shoots in our branded tea business, with the interventions we put in place starting to yield positive results.”
“In our other core business of salt, we continued to execute strongly and have gained market share despite pricing actions taken to mitigate inflation,” he added.
In the March quarter, TCPL witnessed a continued growth in revenue from alternate channels.
“In FY23, the modern trade channel grew 21 per cent, contributing to 14 per cent of India business sales,” said TCPL, adding, “the e-commerce channel grew 32 per cent contributing to 9 per cent of India business sales.”
It is worth mentioning that during the year, TCPL’s new product development (NPD) contributed to 10 percent of its e-commerce revenue.
During the quarter, Tata Starbucks – a joint venture between Tata Consumer Products Ltd and Starbucks Corporation – achieved a robust revenue growth of 48 percent. In FY23, although the pandemic had impacted its base, Tata Starbucks’s revenue growth was 71 percent.
“This was a landmark year for the business, as it reached 4-digit in top-line. It opened 71 new stores during the year and entered 15 new cities — the highest ever annual store addition,” said TCPL, adding that the total number of stores count has gone to 333 across 41 cities.
In the fiscal year that ended in March 2023, TCPL’s consolidated net profit increased by 30.04 percent, amounting to INR 1,320.14 crore, as compared to INR 1,015.16 crore reported in 2021-22.
TCPL’s revenue from operations in 2022-23 amounted to INR 13,783.16 crore, reflecting a growth of 10.92 percent from the previous year’s figure of INR 12,425.37 crore.
TCPL, in a separate filing, announced that its board has recommended a final dividend of INR 8.45 per equity share of Re 1 each for the financial year 2022-23, in a meeting held on Tuesday.
On Tuesday, the shares of Tata Consumer Products Ltd settled at INR 734.30 on BSE, indicating a marginal increase of 0.25 percent from the previous close.