Tata Consumer Products Q3 Results: Revenue rises 17% but margin narrows on higher costs

Revenue for the quarter increased by 17% on a year-on-year basis to ₹4,443 crore, which is in-line with what the CNBC-TV18 poll of ₹4,432 crore had projected.

Net profit for the period remained flat at ₹279 crore. A CNBC-TV18 poll had projected the bottomline figure at ₹311 crore.

Tata Consumer reported a 1.4% drop in its Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) fell 1.4% from last year to ₹564 crore, which was also in-line with the ₹565 crore estimate.EBITDA margin stood at 12.7%, the same figure as anticipated in the poll of analysts. Higher expenses kept a lid on both profit and margins for Tata Consumer during the quarter.
The company reported a rise in other expenses, finance costs and in the cost of material consumed when compared with the same quarter last year.The ongoing quarter had restructuring-related costs worth ₹6.2 crore, while the base quarter had similar costs to the tune of ₹91.5 crore, classified as exceptional items.

For the quarter, Tata Consumer’s India beverage business grew by 9% from the same quarter last year, which is a multi-quarter high, according to the company. The coffee business saw revenue growth of 28% during the quarter.

India Foods business grew 31% on the topline front, aided by Capital Foods. Excluding the acquisition, the business grew by 11%. Value-added salt portfolio also grew by 31% during the quarter.

Capital Foods and Organic India, which Tata Consumer had integrated into the business in April last year, crossed ₹850 crore in combined revenue for the first nine months of the financial year. While the food service pilot is being rolled out to 16 cities, the Pharma channel pilot rollout has been extended to 40 markets.

The international business revenue grew by 8% during the quarter and by 4% in constant currency terms.

Shares of Tata Consumer Products ended 1% higher on Thursday ahead of the earnings announcement at ₹970. The stock is down 23% from its recent peak of ₹1,270.