Tata Consumer Products Q2 results: Net profit rises 7.7% to Rs 364.4 crore

Fast-moving consumer goods major Tata Consumer Products on Friday reported a 7.7 per cent jump in its net profit attributable to shareholders at Rs 364.4 crore in the second quarter of the current financial year (Q2FY25).

Net sales in the reported quarter were up 12.9 per cent at Rs 4214.5 crore on the back of additional revenue coming from two acquisitions (Organic India and Capital Foods). Excluding the acquisitions, it stood at 5 per cent. 

In its India business, the beverages segment’s revenue grew 3 per cent (minus 4 per cent excluding Organic India), as the category was impacted by a subdued demand environment. The coffee business continued its strong trajectory with a revenue growth of 29 per cent for the quarter.

 

The India foods business revenue grew over 28 per cent (plus 9 per cent excluding Capital Foods) and its value-added salt portfolio grew by 26 per cent with rock salt registering record volumes. 

 The Tata Sampann portfolio continued its strong momentum and grew 26 per cent for the quarter.

“With the integration completed for the newly acquired businesses, there was a strong sequential growth of 25 per cent in Capital Foods and 45 per cent in Organic India,” it said in its earnings release.

“During the quarter, we recorded continued growth & market share gain in the India salt business, strong growth in Tata Sampann & Tata Soulful. Our India tea business was impacted by subdued category trends,” said Sunil D’Souza, managing director & CEO, Tata Consumer Products. 

“With the integration completed for both Capital Foods and Organic India, we are starting to see strong synergy benefits and both businesses witnessed strong quarter-on-quarter growth,” he said in the results release.

Tata Starbucks reached the milestone of being the largest café operator by store count, with 457 stores across 70 cities, he added.

The company also said that channels of the future continued to fuel growth and innovation agenda. Its e-commerce channel grew 51 per cent and modern trade recorded 17 per cent growth in the quarter.

The company is incubating new channels - food services/HoReCa (hotels, restaurants, and catering) and pharmacies to fuel growth, and pilot rollouts are in progress.

In its international business, revenue grew 7 per cent (plus 5 per cent constant currency) and the business’ profitability improved significantly led by a strong topline in the UK business and structural interventions made earlier.

On a conference call with analysts, D'Souza talked about competition heating up in the beverage space with Campa Cola's increasing aggression in the market. 
 

He said, "I think a new player coming in with a different price-point disrupts the industry. While on paper it is Rs 10 versus Rs 10, the other piece that you have... is that the trade price was dramatically different." 
 

He explained that the impact was on Tata Gluco+ 
 

"D'Souza said," I am here for the long haul and I will not forgo market share. We have gone in there, we made the corrective actions, we've taken down the price."