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Informist, Monday, Nov. 3, 2025

 

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--Tata Consumer: Expect mid- to high-single-digit revenue growth going ahead
--CONTEXT: Tata Consumer mgmt's comments in post-earnings call with analysts
--Tata Consumer: Expect mid-single-digit volume growth going ahead
--Tata Consumer: Tariffs making margins from international business uncertain
--Tata Consumer: See strong double-digit growth in Organic India portfolio
--Tata Consumer: See double-digit growth in Capital Foods operations
--Tata Consumer: Will enter foods categories where there is trust deficit
--Tata Consumer: Will enter foods categories with high growth potential

 

By Avishek Rakshit & Simran Rede

 

KOLKATA/MUMBAI – Tata Consumer Products Ltd. expects its tea business to record mid- to high-single-digit revenue growth going ahead, with margins in the range of 34-36%, providing sufficient headroom to expand its market share further, a top company official said.

 

Tata Consumer Products Managing Director and Chief Executive Officer Sunil D'Souza told sector analysts during a post-earnings call, "In tea, we will have mid-single-digit growth--volume growth, and a couple of bits of price mix, and therefore make to high-single-digit total revenue growth.

 

"Now that formula can change between volume and price from time to time. Last year, we had high price-driven growth... As we take down prices, we will see volume-driven growth coming back into the category. So, broadly, I would say mid- to-high-single-digit top-line growth is what we would guide for."

 

Tata Consumer aims to maintain its margins within the 34–36% range, opting not to pursue higher margins in order to sustain volume growth and, over the medium-to-long term, expand its market share further, the official said. Stating that maintaining its market share is more important to the country's second-largest tea retailer, D'Souza said, "We have broadly always said we will operate between roughly 34% and 36% gross margin range for tea, and we have broadly reached that level. And the reason why we say 34-36% is, if we try to go beyond that, it's a competitive environment out there and it's a largely commodity price-indexed business, and therefore we will start losing share at that point. And market share to me is an extremely important factor in any business."

 

For Tata Consumer's international business, which contributes about 24% of its total top line, uncertainty surrounding tariffs imposed by the administration of US President Donald Trump has created challenges, particularly in the US, where margins remain under stress. Coffee costs have risen sharply, as they have for other companies, due to the 50% US tariff on Brazilian coffee, the company said. "I wouldn't try to hazard a guess on where coffee prices are going because every time I guessed, I guessed wrong," the managing director said. "Right now, I wouldn't try to guess how tariffs are going to settle."

 

To counter increased coffee costs, Tata Consumer will be raising prices in two tranches in the US. The first tranche will be in January and the second in March. D'Souza said margins in the US are expected to improve following these price hikes.

 

Although the strong performance of coffee in the US drove 21% on-year revenue growth for the company in the country, where Tata Consumer holds 4.1% market share in coffee bags, the company's earnings before interest, taxes, depreciation, and amortisation from international sales fell 17% on year. Margins contracted 400 basis points due to lower gross margins arising from higher coffee costs.

 

For its foods portfolio, which accounts for 33% of the top line, Tata Consumer expects strong double-digit growth from Organic India and Capital Foods, key future growth drivers, with gross margins expected to remain high at around 48–50%.

 

"We had looked at it (Capital Foods) as moving beyond the Chinese into an Oriental portfolio," D'Souza said. "So, the Korean launches which we have done right now, it's only ramen and instant noodles. But you would see much more coming out of the Korean platforms as we go forward."

 

For its Tata Sampann brand, Tata Consumer plans to focus on categories where unbranded commodities, which are sold loose, lack consumer trust, targeting segments where packaging and branding can deliver both high margins and strong growth potential. On Monday, shares of Tata Consumer closed 2.8% higher at INR 1,197.50 on the National Stock Exchange.  End

 

Edited by Subhojit Sarkar

 

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