India's Tata Consumer beats Q3 profit view on price hikes, brand sales

Tata Coffee

02/02/2023 12:43

BENGALURU, Feb 2 (Reuters) - India's Tata Consumer
Products Ltd  TACN.NS  reported a bigger-than-expected rise in
quarterly profit on Thursday spurred by the growth in domestic
sales of branded products and price hikes. 
    The company, which sells Tata Salt and Himalayan mineral
water, said its consolidated net profit jumped 33% to 3.52
billion rupees ($42.83 million), in the quarter ended Dec. 31.
    Analysts on average had expected a profit of 2.81 billion
rupees, according to IBES data from Refinitiv.
    Discretionary spending picked up during the quarter as
India's retail inflation eased in November and December.
    Total revenue from operations rose 8.3% to 34.75 billion
rupees, helped by price hikes, the FMCG company said.
    The domestic branded business, which accounts for about 62%
of the revenue and is home to brands such as Tata Tea, Tetley,
and Tata Salt, grew 7.7% during the quarter.  
    The Tata Group company, which also runs a joint venture with
Starbucks  SBUX.O  in India, said its international business
barely grew 2%, hit by currency headwinds and inflationary
pressures.      
    "In our ... core business of salt, we have continued to gain
market share despite pricing actions taken to mitigate input
cost inflation," said Sunil D'Souza, managing director and chief
executive of the company. 
    The cost of raw materials consumed rose more than 16% in the
quarter.
    "While the branded tea business in India has been impacted
by demand headwinds in some of our key markets, we are putting
in place measures to address some of these challenges," D’Souza
said. 
    The demand in the India beverage business is picking up, the
company said. 
    Last week, Tata Coffee Ltd  TACO.NS , a unit of Tata
Consumer said its quarterly profit slumped 40%, hit by sustained
inflation and weak sales of instant coffee in some markets. 
    Ahead of the earnings, shares of Tata Consumer closed down
0.5%. They rose 3.2% last year. 
    ($1 = 82.1790 Indian rupees)
 (Reporting by Anuran Sadhu in Bengaluru; Editing by Dhanya Ann
Thoppil)
 ((Anuran.Sadhu@thomsonreuters.com; +91 8697274436;))