More Stories

Informist, Monday, Jul. 21, 2025

 

By Avishek Rakshit

 

KOLKATA - An overall pickup in sales and revenue from its core businesses of tea, salt, and domestic foods is expected to help Tata Consumer Products Ltd. report one of the strongest revenue growth in the consumer goods space in the June quarter. An uptick in its international business, which roughly accounts for 25% of its annual revenues, is also expected to boost the company's earnings.

 

India's second-largest tea retailer by value and volume, which will declare its June quarter earnings Wednesday, is expected to see an uptick in tea sales which will boost domestic revenue. Although Tata Consumer does not directly declare the contribution from its tea sales in India to its overall revenue, sector analysts estimate it to be as high as 22-25%. The beverage category in India, of which tea is a part, continues to remain the main revenue earner for the company, despite its increasing focus on building a strong foods and pulses category.

 

Tata Consumer is expected to report a 16.8% on year increase in its consolidated net profit for the June quarter at INR 3.4 billion and the consolidated top line is expected to rise 11.3% on year to INR 48.4 billion, according to the average of estimates from nine brokerages. On a sequential basis, however, the profit is expected to fall 1.7% but the revenue will likely increase by a little over 5%. Tata Consumer had reported a top line of INR 43.5 billion in the year-ago quarter and of INR 46.1 billion in the March quarter. Its net profit was INR 2.9 billion during the year-ago quarter and INR 3.4 billion for the March quarter.

 

Brokerages' estimates of net profit are in the range of INR 3 billion and INR 4 billion, with Nirmal Bang Equities Pvt. Ltd. being the most bullish projecting nearly INR 4 billion. Systematix Shares and Stocks (India) Ltd. has projected the profit only a tad higher than INR 3 billion. Nuvama Wealth Management Ltd. projects Tata Consumer's top line the highest at INR 49.4 billion and Motilal Oswal Financial Services Ltd. predicts it the lowest at a little over INR 47 billion.

 

All brokerage firms are uniform in their projection of the tea retailing business volume in India growing by 3-4%. However, the estimates on the effects of this volume growth vary among the brokerages, primarily on account of their analysis of the effects of the previous price hikes taken by the company and contribution of higher priced tea to the overall tea sales in India.

 

Kotak modelled a 11.5% revenue growth from the domestic tea business, while Nuvama expects it to be between 6-7%. Tata Consumer has been focussing on expanding sales of the higher priced tea brand – Tata Tea Gold - and is also rolling out regional variants according to local taste and preference to boost sales. In the March quarter, Tata Consumer's domestic tea sales volume rose 2% on a moving annual total basis – a common metric used in the consumer goods industry to understand the increase or decrease in sales volume on year. 

 

However, the overall beverages segment is likely to report a mixed performance. The onset of early monsoon and unseasonal rains in summer are expected to have led to lower sales of its ready-to-drink products and branded packaged drinking water.

 

Nuvama said the company's revenue from the salt business is expected to maintain its sequential growth momentum at 13%, but this could largely be on account of the 7% price hike taken towards the end of the last financial year. Nevertheless, brokerages estimate a 4-5% volume growth in the salt segment as well. Tata Consumer is the market leader in salt in the country.

 

Tata Consumer's increasing focus on expanding the foods segment thereby making it a pillar of future growth, has been drawing the attention of investors for some time now. The branded and packaged foods brand, Sampann, is likely to have grown by 25-30% in revenue terms during the June quarter. Although the foods business in India could grow by 14% on year, the growth rate might taper off sequentially from 17% in the March quarter, brokerages said.

 

Even as brokerages remain bullish the company's top line and bottom line performance in June quarter, its earnings before interest, tax, depreciation, and amortisation, and gross margins may not fare so well.

 

Nomura Equity Research is of the view that softening coffee prices would impact the company's plantation and extraction margins.

Kotak pegged the EBITDA to decline by 6.1%. The EBITDA margin is expected to decline to around 12.9%, and gross margins may fall by 340 basis points to 41.5%, Kotak said.

 

According to the average of estimates from nine brokerages, EBITDA could fall by nearly 7% on year, and 6.5% on quarter to INR 6.2 billion.

 

Monday, shares of Tata Consumer ended 0.5% lower at INR 1,090.30 on the National Stock Exchange. A total of 15 brokerages have a 'buy' rating on the company and one has a 'hold' rating.

 

Following are the Apr-Jun earnings estimates for Tata Consumer Products based on reports from nine 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)
Nirmal Bang Equities Pvt Ltd	48,997.00	3,977.00	6,615.00
Nomura Equity Research	48,284.00	3,720.00	6,167.00
JM Financial Institutional Securities Pvt Ltd	48,171.00	3,434.00	6,373.00
Kotak Institutional Equities	48,754.00	3,425.00	6,267.00
Nuvama Wealth Management Ltd	49,415.00	3,373.00	6,350.00
Motilal Oswal Financial Services Ltd	47,115.00	3,303.00	6,115.00
YES Securities (India) Ltd	48,791.00	3,224.00	6,148.00
Elara Securities (India) Pvt Ltd	48,000.00	3,033.00	6,174.00
Systematix Shares and Stocks (India) Ltd	48,336.00	3,018.00	5,982.00
Average	48,429.22	3,389.67	6,243.44

 

End

 

Edited by Vandana Hingorani

 

For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.

 

Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.

 

Informist Media Tel +91 (22) 6985-4000 

Send comments to feedback@informistmedia.com

 

© Informist Media Pvt. Ltd. 2025. All rights reserved.