India's Tata Consumer posts Q1 profit miss on higher expenses

Tata Coffee

26/07/2023 12:39

CHENNAI/BENGALURU, July 26 (Reuters) - India's Tata
Consumer Products  TACN.NS  reported a smaller-than-expected 24%
rise in first-quarter profit on Wednesday, as mounting expenses
outpaced higher sales of its eponymous packaged food and
beverages.
    The Kolkata, West Bengal-based company said its consolidated
net profit rose to 3.17 billion Indian rupees ($38.66 million)
in the quarter ended June 30, marking its eighth consecutive
quarterly profit climb.
    Analysts, on average, had expected a profit of 3.22 billion
rupees, according to IBES data from Refinitiv.
    Total expenses climbed nearly 12% to 33.04 billion rupees
for the Tata Group's consumer staples arm, led by a nearly 8%
jump in input costs.
    Consumer goods majors in India raised product prices in
recent months to counter increased costs but have had to
sacrifice some sales volumes as consumers switched to unbranded 
- and lower-priced - alternatives.
    Tata Consumer said its share of the salt and tea markets
suffered a knock in inflation-hit India even as it spent heavily
on advertising and promotion and launched new products,
including cold brews and packaged food.
    The new launches and price increases still helped
consolidated revenue from operations climb over 12% to 37.41
billion rupees.
    Tata Consumer's India business, which makes up nearly
two-thirds of its overall business and includes its tea, coffee
and water brands, reported an around-16% rise in revenue to
24.78 billion rupees.
    Revenue from its international business, which sells brands
such as Tetley Tea in the United Kingdom and Eight O'Clock
coffee in the United States, rose 7%, slowing from an over-10%
jump last quarter.
    Shares of Tata Consumer closed less than 1% higher before
posting results, taking their gains this year to 14%.
    Last week, its unit Tata Coffee Ltd  TACO.NS  reported a
more-than-5% rise in first-quarter profit.

($1 = 81.9890 Indian rupees)

 (Reporting by Praveen Paramasivam in Chennai and Hritam
Mukherjee in Bengaluru; Editing by Janane Venkatraman)
 ((Hritam.Mukherjee@thomsonreuters.com; Twitter:
@MukherjeeHritam;))