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Informist, Tuesday, Jan. 27, 2026

 

--Tata Consumer: Tea prices are coming down to 2024 level
--Tata Consumer: Coffee prices saw mild uptick after Venezuela developments
--Tata Consumer: Should exit Q4 with roughly 14.5?ITDA margin
--Tata Consumer: Tata Sampann is improving as per our expectations
--Tata Consumer: Ahead of the curve in ready-to-drink distribution
--Tata Consumer: Focusing on increasing share in ready-to-drink segment
--Tata Consumer: E-commerce is strongest sales channel for Tata Sampann
--Tata Consumer: International margin is not at normative level

 

By Afra Abubacker and Anand JC

 

NEW DELHI/MUMBAI – Tata Consumer Products Ltd. expects its operating margins to improve further and end the March quarter at around 14.5-15.0%, driven by easing tea input costs, leverage in the India business, and a gradual recovery in international profitability, the company told analysts at a post-earnings conference call Tuesday. While scaling up is the single biggest lever the company has to improve its margins, it said the product mix right now, which strikes a balance between higher margin products and acquisitions, can offset any weakness.  

 

"Overall, like I said, when we exit Q4, we should be in the ballpark of 14.5-15.0% bit of margin. 15.0% is a normative number which we need to get to," the company's Managing Director and Chief Executive Officer Sunil D'Souza said. In the long run, the company wants to achieve a 17% margin, he added. 

 

For the December quarter, the company reported consolidated earnings before interest, tax, depreciation, and amortisation of INR 7.28 billion, up 26% on year. Its consolidated EBITDA margin expanded to 14.2% from 13.0% a year ago, supported by moderation in tea prices. Tata Consumer said it passed on the benefits of lower input costs in tea to consumers, which helped them register both volume and value growth. 

 

The company aims to improve margins for its base categories, such as coffee, tea, salt, and other staples, through premiumisation and more product launches. "For example, pulses, it was a negative five, and we started five years back. Today, it's close to a double digit," the management said. 

 

While tea prices have largely cooled to levels seen in 2024, D'Souza said some volatility in coffee prices following disruptions in Venezuela is likely to weigh on its margins. International margins, particularly in the US coffee business, remain below the normative levels, it added. 

 

"We've had one more round of price increase in the US in the month of January. Post which we would have broadly passed on the current cost increases," the management said. The company expects international pricing to be normalised after a quarter, it added. 

 

Meanwhile, growth businesses continued to perform in line with the company's expectations. The ready-to-drink segment's revenue rose 26% on year to INR 1.99 billion in the December quarter, marking the second consecutive quarter of double-digit growth, while its volumes grew 27% on year.

 

The company's margins in the Indian packaged beverages business continued to improve and were back to normative operating levels, it said. The management said it is ahead of the curve in ready-to-drink distribution and will prioritise gaining market share. "We have ramped up our distribution, and we should be in a good position by around the end of January, early February, whether it is sales force, whether it is distributors, whether it is salesmen, because after that, the entire focus is on execution," it added. 

 

The company said Tata Sampann's profitability is improving steadily and is now in double digits, supported by strong traction on e-commerce platforms, which remain the brand's strongest sales channel. 

 

The company's consolidated net profit for the reporting quarter rose around 38% on year, but declined nearly 5% sequentially to INR 3.85 billion. Its revenue from operations rose 15% on year and around 3% sequentially to INR 51.12 billion in the December quarter. 

 

On Tuesday, the company's shares closed 2.9% higher at INR 1,187.40 on the National Stock Exchange.  The company announced its results during market hours. End

 

Edited by Saji George Titus

 

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