India's Tata Consumer beats Q2 profit estimates on higher demand for packaged food

Tata Consumer Products

18/10/2024 13:14

Oct 18 (Reuters) - India's Tata Consumer Products
 TACN.NS  reported second-quarter profit above estimates on
Friday, as the salt-to-spices maker benefited from higher demand
for its packaged food amid a pickup in rural demand. 
    The Tata group-owned company reported a near-8% jump in
consolidated net profit to 3.64 billion rupees ($43.3 million)
for the three months ended Sept. 30, outpacing analysts'
estimate of 3.28 billion rupees, per data compiled by LSEG.
    Rural demand has gathered pace over the last three quarters,
including the July-September period, overtaking urban growth,
partly driven by increased government spending.
    Tata Consumer, known for products such as 'Tetley' tea, its
namesake brand of salt and 'Organic India' herbal supplements,
has been expanding its distribution network, including in small
towns and villages, to capitalize on the growing demand.
    This helped its Indian food business, which sells a variety
of packaged products including pulses and spices, post a 28%
jump in quarterly revenue. Its international business,
meanwhile, rose 7%, countering weak demand for its beverages in
India.
    Overall revenue from operations grew nearly 13% to 42.14
billion rupees.
    To counter growing expenses squeezing companies selling
coffee and tea globally, Tata Consumer has increased the prices
of its tea in India, while also jacking up the prices of its
packaged salt.
    Earlier this week, instant coffee maker Nestle India's
 NEST.NS  second-quarter profit fell, as it grappled with higher
ingredient prices and softer consumer demand.
    Meanwhile, Marico  MRCO.NS  expects second-quarter revenue
to grow owing to price hikes, while Dabur  DABU.NS  expects its
first quarterly revenue decline in four years, citing weak
demand for its foods and beverages.
    Tata Consumer's shares closed marginally higher on Friday,
taking gains to 2% this year.

($1 = 84.0280 Indian rupees)

 (Reporting by Ashna Teresa Britto and Praveen Paramasivam;
Editing by Sonia Cheema)
 ((AshnaTeresa.Britto@thomsonreuters.com;))