Tata Consumer Products Ltd on Tuesday reported a 42 per cent year-on-year decline in consolidated net profit at Rs 200 crore for April-June quarter. However, the fall in net profit was lower at 27 per cent adjusted for exceptional items.
The Tata Group company had an exceptional loss of Rs 3.92 crore in June quarter this year as against a gain of Rs 63.31 crore in the year-ago quarter.
Revenue from operations rose 11 per cent to Rs 3,008 crore, mainly driven by growth of 28 per cent in India beverages and 20 per cent in India foods segment. However, the international beverages business reported a 13 per cent decline in revenue which the company attributed to Covid-induced pantry stocking last year.
The earnings before interest, tax, depreciation and amortisation (EBITDA) fell 17 per cent to Rs 403 crore, while EBITDA margin for the quarter was at 13.4 per cent, up 300 basis points on-quarter, but down 452 basis points on-year. The company attributed the fall in EBITDA margin to higher investments in the India business in June quarter and low-cost tea inventory that benefitted the base quarter.
"For the quarter, the India packaged beverages business recorded a 24 per cent value growth and 3 per cent volume growth, impacted by disruption caused by the second wave of COVID," Tata Consumer said.
Meanwhile, the India foods business saw a 17 per cent volume growth during the quarter. The company said its e-commerce business recorded a growth of 153 per cent and contributed 7.3 per cent of domestic sales.
"There has been consistent progress in expanding our sales and distribution reach. Tata Consumer now has a direct reach of 0.82 million outlets and is on track for a direct reach of 1 million outlets by September '21. The sales and distribution redesign has been completed, a pan India harmonized distribution system is now in place and rural reach has been strengthened with 3000+ rural distributors on board," it said.
On the internation business, the company said regular black hot tea category continued to witness a decline in the US and Canada, owing to the pantry stocking effect in the base quarter. In the UK, regular black tea decline slowed down from the previous quarter.
Meanwhile, Tata Starbucks recorded revenue growth of 371 per cent in Q1 on a depressed base of last year that was impacted by nationwide lockdown. Despite this growth, the revenue for the quarter was lower when indexed to the same period in FY20, the company said
On the outlook, Tata Consumer said that with the receding of second COVID-19 wave in India, there seems to be a V-shaped recovery since second half of June, while international markets are also seeing a return to pre-COVID demand trends of packaged tea and coffee categories.
"In India packaged beverages, we are seeing moderation in tea costs and we will stay focused on competitive and profitable growth...With the ongoing distribution expansion and innovations, momentum in India foods business will continue," the company said.
Besides, with increasing mobility, the company also expects to see improving trend in Starbucks and further acceleration in Nourishco business.
Shares of Tata Consumer Products on Tuesday closed 1.01 per cent higher at Rs 767.35 on the BSE.
Copyright©2021 Living Media India Limited. For reprint rights: Syndications Today