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Informist, Wednesday, Jul. 22, 2026

 

By Avishek Rakshit

 

KOLKATA – Healthy volume growth across the domestic foods portfolio and price-led growth overseas are expected to lead Tata Consumer Products Ltd. to maintain its growth momentum in the June quarter, in tune with the previous quarters. While lower tea procurement costs did lead Tata Consumer to cut prices to improve sales volume, the move may not have had the desired result, according to brokerages tracking the company. 

 

Domestic tea sales volume growth of India's second-largest tea retailer by value and volume is likely to remain flat. Hence, price cuts by the company may lower the revenue from its core business. Although Tata Consumer does not distinctively state the contribution of its tea sales in India to its overall revenue, sector analysts estimate it to be as high as 22-25%.

 

The company is scheduled to announce its June quarter earnings on Friday.

 

The beverages category, of which tea is a part, remains the main revenue earner for the company despite its increasing focus on building a strong foods and pulses category. Global sales, majorly in the US, the UK, and Canada, account for 25% of its annual revenues.

 

The company's consolidated top line is expected to rise nearly 12% on year to over INR 53 billion in the June quarter, according to the average of estimates from eight brokerages. However, on a sequential basis, the company's revenue is expected to decline 1.62%. The highest estimate for revenue is INR 54.26 billion by PhillipCapital (India) Pvt. Ltd. and the lowest is 52.89 billion from JM Financial Institutional Securities Pvt. Ltd. 

 

Tata Consumer's consolidated bottom line is expected to rise nearly 23% on year but decline 1.56% sequentially to INR 4.10 billion. The highest estimate for net profit is INR 4.46 billion from Elara Securities (India) Pvt. Ltd. and the lowest is INR 3.79 billion from YES Securities (India) Ltd.

 

Kotak Securities, which expects Tata Consumer to report a consolidated revenue growth of 11% in the June quarter, sees the revenue from tea sales falling 5% on year primarily due to price cuts as sales volume did not pick up. However, the foods business in India is expected to register 17% on-year growth led by revenue growth of 9% in salts and 35% in its Sampann portfolio from a year ago. 

 

Brokerages estimate revenue from Tata Consumer's salt business to grow 9% on year in the June quarter, lower than the 12% growth the company registered in the March quarter. A strong summer season is expected to have boosted the company's ready-to-drink beverages portfolio, largely comprising the NourishCo brand. Brokerages expect the NourishCo business to deliver 30% on-year growth, global sales to grow 20% on year led by the coffee business in the US, and global Capital Foods and Organic India brand portfolios to register 30% on-year growth in the reporting quarter.

 

Tata Consumer's consolidated earnings before interest, tax, depreciation, and amortisation are expected to be INR 7.22 billion for the June quarter, according to the average of estimates. The EBITDA estimates range from INR 7.06 billion by YES Securities to INR 7.36 billion by Bank of America Global Research.

 

Brokerage Kotak Securities estimates 19.2% on-year growth in Tata Consumer's EBITDA on a low base and the EBITDA margin to expand 90 basis points on year to 13.6% in the June quarter. This is based on the fact that tea procurement costs for the company were higher in the year-ago June quarter.

 

At 1110 IST, shares of Tata Consumer were up 0.4% at INR 1,077.00 on the National Stock Exchange. The shares are down nearly 8% since the company announced its March quarter earnings in May.

 

Of the 12 research reports on the company available with Informist, 10 have a "buy" recommendation on the stock at the average target price of INR 1,388. Two brokerages have a "hold" recommendation at an average target price of INR 1,268.

 

Following are the Apr-Jun earnings estimates for Tata Consumer from eight brokerages in descending order of the estimate of net profit in INR billion:

 

Brokerage	Net sales	Net profit	EBITDA
Elara Securities (India) Pvt Ltd	53.58	4.46	7.24
PhillipCapital (India) Pvt Ltd	54.26	4.28	7.30
Bank of America global research	53.91	4.22	7.36
Nuvama Wealth Management Ltd	53.48	4.09	7.22
Kotak Securities Ltd	53.27	3.99	7.24
JM Financial Institutional Securities Pvt Ltd	52.88	3.99	7.19
Systematix Shares and Stocks (India) Ltd	53.16	3.96	7.18
YES Securities (India) Ltd	53.09	3.79	7.06
Average	53.45	4.10	7.22

 

End

 

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Edited by Avishek Dutta

 

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