Tata Consumer Sept qtr net up 5% at Rs 286 crore, revenue grows 9%

Revenue growth mainly driven by the beverages and the foods segments

Tata Consumer Products reported a 5 per cent rise of its consolidated net profit to Rs 286 crore in the quarter ended September on a year-on-year basis. Profit before exceptional items and tax was at Rs 364 crore, also higher by 5 per cent on account of improved gross margin partly offset by higher spends behind brands.

The company's revenue from operations increased by 9 per cent (8 per cent in constant currency terms) from the corresponding quarter of the previous year, mainly driven by growth of 14 per cent in the beverages segment and 23 per cent in the foods segment. Net of exits, operating revenue grew by 11 per cent as compared to corresponding quarter of the previous year.

The company said that its international business' revenues growth, excluding exited businesses, was flat in underlying terms (like for like, adjusted for foodservice business exits last year), cycling an elevated base driven by increased in home consumption of tea and coffee last year.

Sunil D’Souza, managing director & CEO of Tata Consumer Products said “We delivered another quarter of double-digit revenue growth despite a high base last year. Our India business performed well, both our beverages and foods businesses recorded strong revenue growth with both tea and salt seeing market share gains."

"While the worst of tea inflation seems to be behind us, we are now seeing inflationary trends in packaging and freight costs. We will address these by further strengthening operating efficiencies and driving net revenue management,” he added.

The company said that Tata Starbucks recorded revenue growth of 128 per cent in Q2FY22 on a relatively low base of last year, when lockdowns had impacted the business. Moreover, revenue from the brand has been on an upward trajectory each month since the opening up post the second wave of Covid in India.

Tata Consumer now has a direct reach of 1.1 million outlets, up from 0.5 million outlets in September 2020 and is on track for a direct reach of 1.3 million outlets by the end of FY22. The company's rural reach has been further strengthened with more than 4000 rural distributors on board. The company said that its e-commerce vertical recorded 39% growth in Q2FY22 and contributed around 7 per cent of domestic sales.

Advertising and sales expenses increased from Rs 166 crore in Q2FY22 to Rs 212 crore in the quarter ended September and other expenses rose from Rs 339.5 crore to Rs 416 crore. The company's consolidated EBITDA for the quarter grew by 5 per cent to Rs 420 crore compared to the same period last year.

During the quarter ended September 30, the company said its performance was not adversely impacted by the Covid pandemic, except for some businesses such as  those in out of home consumption sectors although there is an improving trend.