Tata Consumer Products rose 2.15% to Rs 515.15 after the company reported a 33% rise in consolidated net profit to Rs 257.06 crore on 18.5% increase in net sales to Rs 2,781.34 crore in Q2 FY21 over Q2 FY20.
Profit before tax in Q2 FY21 stood at Rs 321.46 crore, up by 22.6% from Rs 262.25 crore in Q2 FY20. The company wrote back taxes worth Rs 87.13 crore during the quarter. The company announced its earnings for the September quarter on Saturday (7 November 2020).
EBITDA in Q2 September 2020 improved by 26.8% to Rs 402 crore from Rs 317 crore in Q2 September 2019. EBITDA margin was at 14.4% as on 30 September 2020 as against 13.5% as on 30 September 2019. EBITDA increased due to higher revenue and effective management of discretionary costs, despite unprecedented tea inflation in India.
The company said that during the quarter, overall, India business grew 25%. Within that, India packaged beverages business grew 29%, driven by volume and pricing and; India foods business grew 13%, led by strong growth in both the salt and pulses portfolios. There was also a sequential improvement in Nourish Co's performance, albeit the category continues to be impacted by a decrease in 'out of home' consumption. Branded international beverage business grew 11%, partly benefiting from favourable currency movement. The company said that it expects the growth momentum in India Foods business to continue with distribution expansion and new product launches.
Raw material costs in the second quarter rose by 33.1% to Rs 1,208.11 crore as against Rs 907.68 crore in the same period last year. The company incurred an exceptional expenditure of Rs 23.90 crore in Q2 FY21 as compared to Rs 1.50 crore in Q2 FY20. "Exceptional item for the current quarter represents costs relating to the business integration of foods business of Rs 10 crore, redundancy cost of Rs 9 crore and impairment of assets of Rs 5 crore. Exceptional items for the corresponding quarter of the previous year represent costs relating to scheme of merger, it said.
Sunil D'Souza, managing director & CEO of Tata Consumer Products said: "We posted all round revenue and profit growth during the quarter driven by accelerated momentum in our India business. The integration of our food and beverage business in India is progressing ahead of plan and we should start to see synergy benefits in the near term.
The redesign of our sales and distribution (S&D) system is already yielding results with an expansion in outlet reach as well as significant increase in E-commerce contribution. What I am particularly pleased about is the market share gains we have made both in tea and salt during the quarter, especially in the face of a challenging operating environment and while maintaining the momentum in our integration journey, thanks to our dedicated employees.
Strengthening our core business, driving innovation and digitization, unlocking synergies from the merger, creating a future ready organization and caring for the society will continue to be focus areas for us."
Tata Consumer Products is a food and beverages (F&B) focused consumer products company. The company's portfolio of products includes tea, coffee, water, salt, pulses, spices, and ready-to-cook offerings.
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