Tata Consumer Products Reports Strong Q2 Growth, Sets Ambitious Targets
Tata Consumer Products Limited (TCPL) reported robust Q2 financial results with consolidated revenue up 18% YoY to ₹4,966 crores, EBITDA up 7% to ₹675 crores, and Group Net Profit up 11% to ₹407 crores. The India business grew 18%, while the International business achieved 9% constant currency growth. TCPL set growth targets including a 30% portfolio growth, mid-single-digit volume growth for tea, and a 15% EBITDA margin target by Q4. The company launched 25 new products in Q2 and expanded Tata Starbucks to 492 stores across 80 cities. Management remains focused on growth and innovation while acknowledging potential challenges in the U.S. coffee business.
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Tata Consumer Products Limited (TCPL) has reported robust financial results for the second quarter, demonstrating strong growth across its portfolio while outlining ambitious targets for various business segments.
Financial Highlights
For Q2, TCPL delivered:
- Consolidated revenue of ₹4,966 crores, up 18% year-over-year (YoY)
- EBITDA of ₹675 crores, a 7% increase YoY
- Group Net Profit of ₹407 crores, rising 11% YoY
The company's performance was driven by solid growth in both its India and International businesses, with the India business growing 18% and the International business achieving 9% constant currency growth.
India Business Performance
The India business showed strong momentum:
- India Packaged Beverages revenue grew 12%, with coffee continuing its robust trajectory, recording 56% growth
- India Foods business revenue increased by 19%
- Ready-to-Drink (RTD) business delivered 25% revenue growth despite challenging weather conditions
Growth Targets and Business Outlook
TCPL has set growth expectations for its various business segments:
- 30% portfolio growth target
- Mid-single-digit volume growth aim for the tea business
- Total revenue growth projected in the mid-to-high single digits
- 15% EBITDA margin target by Q4
The company remains cautious about potential risks in the U.S. coffee business and expects tea margins to fall within a 34-36% gross range.
Innovation and Product Launches
TCPL maintained a strong pace of innovation with 25 new product launches in Q2, including:
- Tata Tea Agni's category-first Energy tea with added caffeine
- Tata Sampann's gravy masala mixes and unpolished millets
- Capital Foods' new offerings like Chings Chilli Oil and Korean-inspired noodles
Strategic Developments
The company reported several key strategic moves:
- Continued expansion of Tata Starbucks, adding 7 new stores, bringing the total to 492 across 80 cities
- Strong performance in the U.S. coffee business, with Eight O'Clock coffee gaining market share
- Boosted regional relevance with targeted marketing initiatives, such as a special Pujo menu in East India
Management Commentary
Sunil D'Souza, Managing Director & CEO of Tata Consumer Products, stated, "We delivered a strong topline growth of 18% in Q2, with steady net profit growth. This was the 2nd consecutive quarter of double-digit growth in the India core business across both tea and salt. We remain focused on building for the future with growth, innovation and consumer trust at the heart of everything we do."
Outlook
While TCPL has set growth targets, it also acknowledges potential challenges, particularly in the U.S. coffee business. The company's focus on innovation, expansion of its product portfolio, and strategic market initiatives position it well for continued growth. However, investors should note that the projected growth and margin targets are subject to market conditions and successful execution of the company's strategies.
As TCPL continues to navigate a competitive landscape, its ability to meet these targets while maintaining profitability will be crucial for long-term success. The company's diverse portfolio and strong market presence provide a solid foundation for its growth aspirations, but careful monitoring of market dynamics and consumer trends will be essential in the coming quarters.
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