Tetley Tea maker Tata Consumer misses Q1 profit view as expenses spike

Tata Consumer Products

30/07/2024 14:02

BENGALURU, July 30 (Reuters) - Tata Consumer Products
 TACN.NS  reported a first-quarter profit on Tuesday that missed
estimates, as surging costs ate into its revenue growth.
    The company, which sells salt under the Tata brand and the
Tetley brand of tea, said its consolidated net profit fell
nearly 9% to 2.90 billion rupees (about $35 million) in the
three months ended June 30, marking its third straight quarter
of profit fall.
    Analysts had estimated 3.48 billion rupees, as per LSEG
data.
    The Tata Group company was hurt by a nearly 81% surge in
finance and amortisation charges, taking its total expenses up
by 19% to 39.26 billion rupees.
    Additionally, tea prices rose 16% during the quarter in
North India, while coffee prices rose around 57%, pushing up the
cost of raw materials consumed by 15%.
    However, revenue from operations grew 16% to 43.52 billion
rupees, marking its fastest revenue growth in thirteen quarters
and beating analysts' estimate of 42.97 billion rupees, owing to
a 9% rise in its salt business.
    Additionally, the Tata Group company's 'growth business' -
which houses the Tata Sampann pulses and acquisitions made in
the previous quarter - recorded a 20% organic rise in revenue. 
    The company acquired Capital Foods, the owner of consumer
products Ching's Secret and Smith & Jones, and Organic India,
which makes tea and herbal supplements, in the January-March
quarter.
    Tata Consumer's smaller rivals Marico  MRCO.NS  and Dabur
 DABU.NS  also reported a pick-up in their revenue in the
April-June quarter, suggesting demand has been improving
gradually, while rival Nestle  NEST.NS  missed first-quarter
earnings estimates.

($1 = 83.6990 Indian rupees)

 (Reporting by Manvi Pant and Ashna Teresa Britto in Bengaluru;
Editing by Janane Venkatraman
)
 ((Manvi.Pant@thomsonreuters.com; +918447554364;))