Earnings Outlook
Tata Consumer consol PAT seen up 44% on yr on price hikes
This story was originally published at 19:59 IST on 18 April 2025
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By Avishek Rakshit
KOLKATA – Even as the March quarter is expected to mirror the subdued demand stressing the consumer goods industry, price hikes could lead to better financial performance for companies like Tata Consumer Products Ltd.
The Tata group's flagship consumer goods company is expected to report a sharp 44% on-year jump in its consolidated net profit to INR 3.1 billion for Jan-Mar, while the consolidated revenue is expected to rise 16% on year to INR 45.5 billion, according to the average of estimates from 12 brokerages. Sequentially, the net profit could rise 12%, but the revenue growth could be lower at 2.4%.
The country's second-largest tea retailer will declare its financial results for the quarter and year ended Mar. 31 on Wednesday, followed by a call with sector analysts the same day.
Amongst the brokerages, Equirus Securities Pvt. Ltd. estimated the highest net profit for Jan-Mar at INR 3.6 billion, and Morgan Stanley estimated it much lower at INR 2.6 billion. The highest estimate of revenue was given by Systematix Shares and Stocks (India) Ltd. at INR 46.6 billion, and the lowest estimate was from Nirmal Bang Equities Pvt. Ltd at INR 44.6 billion.
Tata Consumer's revenue growth is likely to come primarily from increased prices, although the company is expected to have witnessed some increase in sales volume as well, brokerages said. Kotak Institutional Equities pegged a 5% volume growth, and a 11% value growth in the domestic tea business, while Nuvama Wealth Management Ltd. estimated a 3-4% volume growth, and a 10% value growth. Morgan Stanley estimated a higher value growth of 12% in the March quarter.
Although Tata Consumer has diversified its portfolio and has been focussing on food products as a key growth driver, the tea business remains crucial and a top-line driver for the company. Its business in India, of which tea is a part, usually accounts for 62-65% of its consolidated annual revenue.
Kotak Institutional Equities added that Tata Consumer is likely to have seen a 14.5% on-year organic growth for its foods business in India, up from 11% sequentially. This growth in the foods business is led by an 11% upswing in salt sales and a 25% growth in sales of branded commodities under the Sampann brand name. The NourishCo brand of beverages is likely to have grown in low teens.
In a report, Nuvama Wealth Management, which has predicted a 15.4% on-year revenue growth, said the company's revenue from the Capital Foods brand could improve by 5% sequentially, while revenue from the Organic India brand portfolio could remain flat. Overall beverage sales in India is likely to grow 13-14% on year during Jan-Mar due to price increases. In the comparative quarter of 2024-25 (Apr-Mar), total beverage sales in India grew 3%, and in Oct-Dec, the growth was 16%.
Notably, Nuvama Wealth Management said value-added salt sales, which offer better revenue and margins, are expected to report stronger growth that the mass salt portfolio.
Tata Consumer's non-branded business is also expected to grow around 10% due to strong realisations from coffee sales and tea sales to packeteers. Apart from the consumer facing business, Tata Consumer also has associate companies in the plantation business, which sell the produce to other companies directly or through commodity auctions. However, higher tea procurement cost, which could benefit Tata Consumer's plantations business, is likely to affect its mainstay tea retailing business, which is expected to affect margins, PhillipCapital (India) Pvt. Ltd. said in a note.
Tata Consumer is expected to report an earnings before interest, tax, depreciation, and amortisation, or EBITDA of nearly INR 6 billion in Jan-Mar, according to the average of estimates from 11 brokerages. PhillipCapital estimated the highest EBITDA at INR 6.1 billion, and Morgan Stanley estimated it the lowest at INR 5.8 billion.
On Thursday, shares of Tata Consumer closed 1.3% up at INR 1,120.2 on the National Stock Exchange.
Following are the Jan-Mar earnings estimates for Tata Consumer Products based on reports from 12 brokerages in descending order of the estimate of net profit –
| Broker Name | Net Sales (in INR million) | Net Profit (in INR million) | EBITDA (in INR million) |
| Equirus Securities Pvt Ltd | 46,108.00 | 3,591.00 | 6,046.00 |
| Nuvama Wealth Management Ltd | 45,328.00 | 3,436.00 | 5,983.00 |
| Elara Securities (India) Pvt Ltd | 45,183.00 | 3,381.00 | 5,951.00 |
| Sharekhan Ltd | 45,530.00 | 3,340.00 | |
| PhillipCapital (India) Pvt Ltd | 45,276.00 | 3,319.00 | 6,093.00 |
| Motilal Oswal Financial Services Ltd | 45,891.00 | 3,108.00 | 5,909.00 |
| Systematix Shares and Stocks (India) Ltd | 46,560.00 | 3,081.00 | 6,024.00 |
| Nirmal Bang Equities Pvt Ltd | 44,494.00 | 2,973.00 | 6,004.00 |
| JM Financial Institutional Securities Pvt Ltd | 45,603.00 | 2,947.00 | 5,889.00 |
| IIFL Capital Services Ltd | 45,349.00 | 2,807.00 | 6,071.00 |
| Kotak Institutional Equities | 45,930.00 | 2,762.00 | 6,025.00 |
| Morgan Stanley | 44,907.00 | 2,634.00 | 5,780.00 |
| Average | 45,513.25 | 3,114.92 | 5,979.55 |
End
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Tanima Banerjee
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