Tata Consumer Q4 net profit surges 59% on exceptional gains; EBITDA dips

Sunil D’Souza, MD & CEO, Tata Consumer Products

Fast-moving consumer Goods (FMCG) maker Tata Consumer Products reported a 59 per cent increase (₹344 crore) in consolidated net profit for the quarter that ended March 31, aided by exceptional gains.

The company’s consolidated EBITDA for the quarter declined 1 per cent on account of higher input costs in India and international businesses. The company stated that the EBITDA margin for the year was 14.2 per cent, down 110 bps, impacted by tea cost inflation in India.

The company announced a dividend of ₹8.25 per share.

In the domestic business, 17.37 per cent strong growth was registered in the beverages category. The company stated that, excluding acquisitions, the revenue growth was 12 per cent, driven by an underlying 13 per cent increase in the India business, 2 per cent in international business and 23 per cent in non-branded business. There was an exceptional gain of ₹45 crore, net of fair value gains of ₹120 crore on remeasurement of contingent consideration. 

The company stated that its e-commerce channel grew 66 per cent and modern trade recorded 26 per cent growth during the quarter. TCP launched 41 new products during the year, and the innovation-to-sales ratio for India was at 5.2 per cent.

Capital Foods and Organic India, acquired by Tata Consumer Products, registered a 19 per cent combined revenue growth. For the year, the combined revenue was at ₹1,173 crore.

The company is not looking to enter new categories but has stated that it will innovate and expand its product portfolio in the categories that it operates in.

Tata Starbucks, the company, added six new stores during the quarter and entered six new cities. The total number of stores of Tata Starbucks is 479 across 80 cities.

“We delivered a topline growth of 17 per cent during the quarter, bringing FY25 growth to 16 per cent. While the RTD business was impacted earlier in the year, we have seen a strong rebound as we exit the year. We delivered a strong performance in the International Business, with all our geographies demonstrating growth. In India, we continued strengthening our Sales & Distribution infrastructure and completed the rollout of a next-gen Go-to-Market platform. Overall, despite a tough operating environment, we delivered strong growth across businesses, and we will continue to drive consistent, profitable growth as we move forward,” said Sunil D’Souza, Managing Director & CEO of Tata Consumer Products.

Margins recovery/Tea prices

The company undertook price increases during the full year and is anticipating the tea prices to soften.

“We have passed on 29 per cent of the tea costs for the full year. We absorbed 54 per cent of the costs to make sure to remain competitive. Going forward, we expect the tea costs to soften and the margins to return. We expect expansion of EBITDA,” said D’Souza in an analyst call after the results.

Recession in the International market

The international business revenue grew by 5 per cent. The company does not anticipate a significant impact from the recession on the international market.

“We do not operate in the discretionary category and are present in the basic coffee and tea category in the USA market. There could be an impact from the recessionary risk, but I do not think it will be significant enough. In the UK market, we are strong and in the number 2 position; we have also started brand building for Tetley,” said D’Souza.

Published on April 23, 2025