India's Tata Coffee reports Q1 profit rise on improved net sales

Tata Coffee

19/07/2023 09:53

BENGALURU, July 19 (Reuters) - India's Tata Coffee
 TACO.NS  reported a more-than-5% rise in its first-quarter
profit on Wednesday as net sales in its tea plantation and
instant coffee businesses improved.
    The coffee processor's net profit attributable to
shareholders rose to 474.8 million rupees ($5.8 million) in the
quarter ended June 30 while revenue from operations rose nearly
6% to 7.01 billion rupees.
    "Tea plantations' performance was robust in the quarter,
driven by higher crop production and lower cost of production,"
said managing director Chacko P Thomas.
    Several coffee processors, including Tata Coffee, said in
recent months that demand from restaurants, cafes and offices
bounced back as people ventured out more frequently.
    Shares of Tata Coffee, which exports to over 40 countries,
are up 1.2%.
    The company, which also supplies to chain stores of a joint
venture between Starbucks  SBUX.O  and parent Tata Consumer
Products  TACN.NS , said revenue from its value-added products
business rose 3% from a year earlier.
    The segment constitutes almost 82% of the company's total
income and includes the production and sale of roasted, ground,
and instant coffee products.
    Last month, Reuters reported that Starbucks is revamping its
strategy in India, changing prices and expanding into smaller
cities amid fierce competition from domestic startups.   
    Tata Coffee's total expenses, however, rose more than 8%,
making its earnings before interest, taxes, depreciation, and
amortisation (EBITDA) margin contract to 16.73% from 17.61% a
year earlier.
    The company said that lower bag volumes and higher input
costs impacted the performance of its unit, Eight O'clock
Coffee.
    Tata Consumer Products will report its earnings next week. 

($1 = 82.1075 Indian rupees)

 (Reporting by Varun Vyas in Bengaluru; Editing by Janane
Venkatraman)
 ((varunvyas.hebbalalu@thomsonreuters.com;))