An increase in total expenditure, coupled with a heavy deferred tax burden, pulled down the consolidated net profit of Tata Tea Ltd by 77 per cent to Rs 92.23 crore in the quarter ended December 31, 2009. The company had clocked a profit of Rs 396.12 crore in the corresponding period in the previous financial year.
Consolidated net sales saw a decent 20.55 per cent growth in the third quarter at Rs 1,540.06 crore, against Rs 1,277.51 crore in the same period a year before.
Total expenditure for the quarter increased 22 per cent, mainly on account of higher advertising, raw material and employee costs, in addition to miscellaneous expenditure, which increased by 15 per cent.
Advertising costs alone increased by 21 per cent in the third quarter. This, however, yielded results, as Tata Tea saw a 100-basis-point increase in value share over arch rival Hindustan Unilever in the third quarter. The value share of the company’s overall tea portfolio stood at 22.2 per cent in the third quarter in comparison with Hindustan Unilever’s 21.1 per cent.
In terms of volume share, Tata Tea has had a lead over Hindustan Unilever for two years now, the company’s Executive Director (Marketing) Sangeeta Talwar said. For the third quarter, Tata Tea’s volume share stood at 19.7 per cent, in comparison with Hindustan Unilever’s 17.1 per cent.
The Tata Tea stock lost 1.15 per cent at Rs 918.85 by close of Thursday’s trade on the Bombay Stock Exchange.
