Tata Consumer Products Ltd. (TCPL) on Thursday reported a 36.25% rise in consolidated net profit to ₹389.43 crore for the second quarter ended September 30, led by strong growth in the domestic market.
The company had posted a net profit of ₹285.80 crore for the July-September period a year ago, TCPL, earlier known as Tata Global Beverages Ltd., said in a BSE filing.
Revenue from operations climbed 10.87% to ₹3,363.05 crore during the quarter under review as against ₹3,033.12 crore in the corresponding period last year.
Total expenses of the Tata group’s FMCG arm were at ₹3,021.90 crore, up 11.55% from ₹2,708.91 crore earlier.
Speaking to PTI, TCPL Group CFO L. Krishnakumar said the overall growth was “led by the strong performance by the India business”, especially the food business, which was a “star performer”.
Moreover, TCPL’s expansion of its distribution network in the domestic market and new product launches contributed to the growth in the July-September quarter, he added.
TCPL’s revenue from the Indian market in July-September rose 9.19% to ₹2,159.95 crore, as against ₹1,978.08 crore in the year-ago period.
During the quarter, TCPL’s India foods business registered 29% revenue growth. Its salt portfolio also continued its momentum and recorded double-digit revenue growth.
Its Tata Sampann portfolio posted strong double-digit growth, led by broad-based performance across pulses, poha and spices.
“Food portfolio is doing well. The new business like Sampann portfolio and water portfolio is doing well,” Mr. Krishnakumar said.
However, the packaged beverages business in the domestic market logged a 7% revenue decline due to pricing corrections and overall softness in the category.
“We continued to record volume market share gains in branded tea,” TCPL said in an earnings statement.
According to TCPL, it has achieved a new milestone with its sales and distribution in the domestic market now having a direct reach of 1.4 million outlets. “Moreover, the number of our super stockists has grown by 20 per cent,” it added.
TCPL Managing Director and CEO Sunil D’Souza said: “We delivered another quarter of double-digit revenue growth while balancing margins despite inflationary pressures, weakness of currency and some lag in pricing in International Markets.” While the branded tea category in India was tepid, TCPL continued to gain volume market share, he said.
“In our other core business of salt, despite significant inflation-led pricing, we have continued to gain market share and strengthen our leadership position,” Mr. D’Souza added.
Its international business contributed revenue of ₹838.87 crore, up 7.37% compared to ₹781.27 crore earlier. “International business was impacted because of commodity cost and inflation,” said Mr. Krishnakumar, adding, “The company expects gradual improvement and we are looking up for restructuring opportunities. Over the next few quarters, we expect profitability to improve and come back.”
Tata Starbucks, a 50:50 joint venture between TCPL and Starbucks Corporation, had revenue growth of 57% for the quarter, led by normalised store operations and a revival in out-of-home consumption It opened 25 new stores during Q2, the highest ever number of quarterly store openings, and entered five new cities.
“We have accelerated the pace of expansion,” said Mr. Krishnakumar.
The total number of Tata Starbucks stores, operated by the JV, has gone up to 300 across 36 cities.
