Tata Consumer Products' consolidated net profit dropped 38.15% to Rs 240.65 crore on a 10.85% rise in revenue from operations to Rs 3,008.46 crore in Q1 June 2021 (Q1 FY22) over Q1 June 2020 (Q1 FY21).
For the quarter, revenue from operations increased by 10.85% (10% in constant currency) as compared to corresponding quarter of the previous year, mainly driven by growth of 28% in India beverages (including NourishCo) and 20% in India Foods. International business reported lower revenue as previous year benefitting from COVID-19 induced pantry stocking.
Consolidated profit before tax skid 32.65% to Rs 336.36 crore in Q1 FY22 as against Rs 499.49 crore in Q1 FY21. Profit before exceptional items and tax is lower as previous year had the benefits of softer tea commodity cost in India and pantry stocking gains in the international business. The group's consolidated net profit was lower, mainly driven by lower PBT and one-time exceptional gain in the previous year. The Q1 earnings was declared after trading hours yesterday, 3 August 2021.
For the quarter, the India Packaged beverages business recorded a 24% value growth and 3% volume growth, despite being impacted by disruption caused by the second wave of COVID-19. In addition to recording overall market share gains, the branded tea business achieved market share leadership in the e-commerce channel. For the quarter, the India Foods business registered a 20% revenue growth and 17% volume growth, despite a high base.
Tata Salt continued to see market share gains with value-added salts portfolio recording significant growth. There has been consistent progress in expanding the sales & distribution reach. Tata Consumer Products has a direct reach of 0.82 million outlets and is on track for a direct reach of 1 million outlets by September 2021. The sales and distribution re-design has been completed, a pan India harmonized distribution system is now in place and rural reach has been strengthened with 3000+ rural distributors on board. E-commerce recorded significant growth of 153% Y-o-Y (year-on-year) and contributed 7.3% of domestic sales.
Tata Starbucks recorded revenue growth of 371% in Q1 on a depressed base of last year that was impacted by nationwide lockdown. Despite this growth, the revenue for the quarter was lower when indexed to the same period in FY20. While April 2021 and May 2021 this year were impacted by localized lockdowns, June 2021 saw a V shaped recovery with gradual easing of restrictions on store operations. The premium coffee-chain introduced its signature coffee essentials on the Tata Cliq luxury platform while its delivery contribution increased to 27%, driven by several focused initiatives to offset the decline in dine in.
Sunil D'Souza, the managing director (MD) and chief executive officer (CEO) of Tata Consumer Products, has said that: "We delivered a 11% revenue growth amidst a challenging operating environment and on a high base last year. Despite the severe second wave of COVID, our India businesses performed well with both the Beverages & Food businesses recording strong double digit growth and tea & salt recording market share gains. Even though there was significant disruption on the ground, we sustained momentum in expanding our distribution reach, continued to drive innovation and invest behind our brands. We continued our focus on embedding digital across the value chain and laid out our Digital Strategy and Vision with a detailed roadmap."
"With the second wave of COVID receding in India, we are seeing a V shaped recovery since the latter part of June. In our international business, we are seeing a return to pre COVID demand trends for tea and coffee. Given the dynamic environment, we will continue to stay agile to accelerate the growth momentum across our businesses and keep making progress in our transformation agenda to deliver competitive and profitable growth."
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Tata Consumer Products is a focused consumer products company uniting the principal food and beverage interests of the Tata Group under one umbrella. The company's portfolio of products includes tea, coffee, water, salt, pulses, spices, and ready-to-cook offerings.
Shares of Tata Consumer Products lost 0.70% to Rs 762 on BSE. The scrip hovered in the range of Rs 756.35 to Rs 769 during the day.
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