India's Tata Consumer beats quarterly profit view as tea prices stabilise

Tata Consumer Products

03/11/2025 09:50

Nov 3 (Reuters) - India's Tata Consumer Products TACN.NS reported second-quarter earnings above expectations on Monday, helped by easing tea prices, a key commodity for the company.

The company's consolidated net profit rose 11% on-year to 4.04 billion rupees ($45.96 million) in the three months ended September 30, above analysts' average estimate of 3.69 billion rupees, per data compiled by LSEG.

Revenue, which rose 18% to 49.66 billion rupees, also beat analyst estimates of 47.36 billion rupees.

Tea prices, which hit a peak in June due to adverse weather conditions and supply chain disruptions, waned year-on-year for the bulk of the reporting quarter, brokerage Motilal Oswal said.

The company's tea portfolio accounts for a significant portion of its revenue, and the lower prices helped its branded India business to record a 47.5% rise in earnings before interest, taxes, amortization and depreciation (EBITDA).

However, higher marketing expenses and a steep cost inflation in coffee prices - which led to lower profit in its international business - pressured its overall EBITDA margins, which declined 130 basis points to 13.6%.

Tata Consumer has been attempting to grow its packaged foods segment - which includes items such as chilli oil and instant noodles - as a percentage of revenue to hedge its margins against commodity price fluctuations.

Its 'growth' business, which counts such food items, saw a revenue growth of 27% year-on-year, faster than Tata's overall revenue growth of 18%.

The company's shares rose 2.8% after the results.

($1 = 87.8950 Indian rupees)

 (Reporting by Hritam Mukherjee and Ananta Agarwal in Bengaluru; Editing by Janane Venkatraman)

 ((Hritam.Mukherjee@thomsonreuters.com; X: @MukherjeeHritam;))