Tata Consumer Products Limited (TCPL) has reported a robust performance for the first quarter, with consolidated revenue growing by 10% year-on-year to Rs 4,779.00 crores. The company's financial results, released on July 23, highlight steady growth across its branded and non-branded businesses, despite facing challenges in certain segments.

Key Financial Highlights

• Consolidated revenue increased by 10% (9% in constant currency) to Rs 4,779.00 crores
• Group Consolidated Net Profit rose by 15% to Rs 332.00 crores
• India business revenue grew by 11%
• International business delivered 5% constant currency growth
• Non-branded business grew 6% in constant currency terms

Business Segment Performance

India Business

The India business demonstrated strong growth, with revenue increasing by 11% compared to the same quarter last year. Key highlights include:

• India Packaged Beverages business revenue grew 12%
• Coffee segment showed exceptional performance with 67% revenue growth
• Tata Salt launched "Namak Ho Tata Ka 2.0" campaign to reinforce brand promise
• Value-added salt portfolio grew 31%
• Tata Sampann portfolio continued its strong performance, growing 27%

International Business

The international business maintained its momentum with a 5% constant currency revenue growth. Notably:

• UK operations saw Tetley's new TV ad "Britain's tea" well-received by consumers
• In the USA, the coffee business registered strong growth, with Eight O'Clock coffee gaining market share in bags and K-Cups

Non-Branded Business

The non-branded business, which includes plantation and extraction operations for tea, coffee, and other produce, grew by 6% in constant currency terms.

Market Position and Growth Strategies

Tata Consumer Products continues to maintain a strong position in key markets:

• 20% market share in the UK tea business
• Approaching double-digit share in fruit and herbal teas in the UK
• Expects 6-8% total growth in its tea business with mid-single digit volume increases

The company has outlined several strategies for future growth:

1. Increasing advertising and promotion spending from 6.8-6.9% to 7.5% of sales
2. Focusing on innovation, particularly in Health & Wellness, Convenience, and Premiumization categories
3. Strengthening omnichannel capabilities, with e-commerce growing 61% and Modern Trade recording 21% growth
4. Expanding into new channels such as Food Services and Pharmacies

Challenges and Outlook

Despite the overall positive performance, TCPL faced some challenges:

• Operating performance of the branded business was impacted by tea and coffee cost inflation in India and International markets
• The Ready-to-Drink (RTD) business volume growth was impacted by unseasonal rains
• Non-Branded Business profits were affected by reversals of fair value gains from the previous year due to easing coffee terminal prices

Sunil D'Souza, Managing Director & CEO of Tata Consumer Products, commented on the results: "We delivered a steady topline growth of 10% in Q1, with double-digit net profit growth. During the quarter, we recorded double-digit growth in the core India business across both tea and salt backed by volume growth. Tata Sampann continued its strong trajectory, with new launches & innovations performing well."

As Tata Consumer Products continues to navigate market challenges and capitalize on growth opportunities, the company remains focused on innovation, expanding its distribution network, and strengthening its market position across various product categories and geographies.

Tata Starbucks Expansion

Tata Starbucks, a joint venture between Tata Consumer Products and Starbucks Corporation, continued its expansion in India:

• Added 6 net new stores during the quarter
• Total store count reached 485 across 80 cities
• Cold Brew category showed growth, contributing to a larger share of the beverage menu mix
• Gen-Z focused 'Refreshers' contributed to growth by driving incremental trials

The company's multi-pronged approach to growth, coupled with its strong market position in key segments, positions Tata Consumer Products well for continued success in the coming quarters.

Tata Consumer Products Limited (TCPL) has reported a robust start to the fiscal year, with consolidated revenue growing 10% year-on-year to Rs 4,779.00 crores in the first quarter. The company's strategic focus on broad-based FMCG growth is yielding results, as it continues to expand its product portfolio and distribution channels.

Strong Performance Across Segments

The company's growth was driven by solid performance across its key business segments:

• India Business: Recorded an 11% growth, with double-digit growth in both tea and salt categories.
• International Business: Achieved a 5% constant currency revenue growth.
• Non-Branded Business: Grew by 6% in constant currency terms.

EBITDA and Profit

Despite the topline growth, TCPL faced some headwinds:

• Consolidated EBITDA declined by 8% to Rs 615.00 crores, primarily due to higher tea costs in India and coffee price corrections in the non-branded segment.
• The EBITDA margin stood at 12.9%, down 250 basis points year-on-year.
• Group Consolidated Net Profit, however, increased by 15% to Rs 332.00 crores, benefiting from improved performance of associates and joint ventures.

Strategic Initiatives Driving Growth

Tata Consumer Products is executing multiple strategic initiatives to fuel its FMCG growth:

1. Premiumization: The company is focusing on premium product offerings across categories.
2. Omnichannel Expansion: TCPL reported strong growth in e-commerce (61% YoY) and modern trade (21% YoY) channels.
3. Innovation-Led Launches: New product introductions are driving growth across segments.
4. High-Growth Verticals: The company is scaling up businesses like Sampann, ready-to-drink beverages, Organic India, and international coffee operations.

Category Performance

• Tata Sampann: Continued its strong momentum with a 27% year-on-year growth in Q1.
• Ready-to-Drink (RTD): Despite unfavorable weather conditions, the RTD business recorded positive volume growth.
• Value-Added Salts: Grew by an impressive 31% during the quarter.
• Coffee: The US coffee business registered strong growth, with Eight O'Clock coffee gaining market share.

Expansion and Innovation

Tata Consumer Products continues to expand its reach and innovate across categories:

• Tata Starbucks added 6 new stores, bringing the total to 485 across 80 cities in India.
• Tetley introduced new green tea variants enriched with L-Carnitine and Biotin, catering to health-conscious consumers.
• The company launched 8 new products in the RTD segment, exploring new formats and occasions.

Management Commentary

Sunil D'Souza, Managing Director & CEO of Tata Consumer Products, stated, "We delivered a steady topline growth of 10% in Q1, with double-digit net profit growth. During the quarter, we recorded double-digit growth in the core India business across both tea and salt backed by volume growth. While transitory issues impacted growth in Capital Foods and Organic India, our focus now turns to delivering on our aspirations in these businesses through ramping up advertising, innovation and distribution expansion."

Outlook

As Tata Consumer Products continues its transformation into a comprehensive FMCG company, it remains focused on:

• Strengthening its core categories of tea and salt
• Accelerating growth in emerging businesses
• Expanding distribution and improving execution capabilities
• Driving innovation across its product portfolio

With its strategic initiatives and focus on premiumization and channel expansion, Tata Consumer Products is well-positioned to capitalize on the growing FMCG market in India and key international markets.