Analyst Concall
Tata Consumer may raise prices if input costs go up
This story was originally published at 22:16 IST on 24 July 2026
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--Tata Consumer: Will pass on cost inflation if any to maintain margins
--CONTEXT: Tata Consumer mgmt's comments in post-earnings call with analysts
--Tata Consumer: Maintain 30% revenue growth guidance for Sampann for FY27
--Tata Consumer: Have raised tea prices marginally in June
--Tata Consumer: See some inflation in tea procurement costs
--Tata Consumer: Expect to deliver 50-70 bps margin expansion in FY27
--Tata Consumer: Aim to improve water business margins due to higher throughput
--Tata Consumer: Plan to launch more value-added water products in FY27
--Tata Consumer: Aim to increase water sales coverage in north, west India
By Avishek Rakshit & Simran Rede
KOLKATA/MUMBAI – After raising tea prices marginally in June, Tata Consumer Products Ltd. may raise prices further across its product categories if it is faced with increase in commodity costs to maintain its margins, Managing Director and Chief Executive Officer Sunil D'Souza said Friday.
"If there is (input cost) inflation, we it will pass on. There might be a bit of a time lag between when it hits us and when we pass it on, but I would say, broadly, we would pass on the inflation and try to ensure that we maintain margins," the top company official told sector analysts in a post earnings conference call.
D'Souza said the company was witnessing around 7-10% increased costs in tea but the peak tea procurement season has just started, and it was too early to form an opinion on tea costs for the company. The current state of tea production in Assam--the largest tea growing region in the country--is good, D'Souza said.
In the tea plantations industry, production volume peaks in monsoon season but the quality of tea produced in the monsoons is inferior compared with the summer season. However, the tea during monsoons is priced lower compared with the summer crop and many companies buy tea in bulk quantity from the monsoon season.
According to data from Tea Board India, tea auction prices in Guwahati--the largest tea auction centre in the country--rose over 7% on year last Saturday to INR 248.55 per kg, while auction prices in Kolkata--the second-largest tea auction centre in India--rose over 8% on year to 279.31 last Saturday.
"I would say right now, we're seeing 7% to 10% (inflation in tea)...And if that happens, then we will look at judicious pricing to make sure margins are maintained. We've already taken some minor price increases in the month of June. But if the trend persists, we will look at maintaining margins and take pricing up," D'Souza said.
Apart from tea, Tata Consumer also raised prices of salt, where it is the market leader and registered a 7% on-year value and volume growth from the salt business in the June quarter. It posted an earnings before interest, tax, depreciation, and amortisation margin of 13.6% in the June quarter as against 12.9% in the year-ago quarter. The EBITDA also increased 19% on year to INR 7.30 billion. In the ongoing financial year, Tata Consumer is eyeing to increase its margins by 50-70 basis points and eyeing a top-line growth of 30% from its growth businesses such as products under the Tata Sampann brand, D'Souza said.
WATER FOCUS
While maintaining its stance to strengthen its core businesses in tea and salt and expand emerging businesses which have a significant headroom for growth, Tata Consumer is planning to increase its geographic reach with its water portfolio and roll out new value-added water products.
"We have availability in probably 75% of the country, but in real distribution, marketing, having got our act together, we're probably still at 40-50%. So, we've got a long way to go," D'Souza said adding that the company's water business is primarily concentrated in Andhra Pradesh, Telangana, Odisha, Tamil Nadu, West Bengal, Bihar, and Uttar Pradesh.
"North and west are, I would say, broadly white space geographies where we've got a lot of work to do," he said.
While planning to increase the geographic reach of the water business, Tata Consumer is eyeing to improve its margins from this segment by improving utilisation and increased throughputs. New value-added water products, which are margin accretive for the company are also likely to be launched in the coming quarters, D'Souza said.
Friday, shares of Tata Consumer closed 1.8% lower at INR 1,088.00 on the National Stock Exchange. End
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Akul Nishant Akhoury
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