BENGALURU (Reuters) – Tata Consumer Products reported a first-quarter profit on Tuesday that missed estimates, as surging costs ate into its revenue growth.
The company, which sells salt under the Tata brand and the Tetley brand of tea, said its consolidated net profit fell nearly 9% to 2.90 billion rupees (about $35 million) in the three months ended June 30, marking its third straight quarter of profit fall.
Analysts had estimated 3.48 billion rupees, as per LSEG data.
The Tata Group company was hurt by a nearly 81% surge in finance and amortisation charges, taking its total expenses up by 19% to 39.26 billion rupees.
Additionally, tea prices rose 16% during the quarter in North India, while coffee prices rose around 57%, pushing up the cost of raw materials consumed by 15%.
However, revenue from operations grew 16% to 43.52 billion rupees, marking its fastest revenue growth in thirteen quarters and beating analysts’ estimate of 42.97 billion rupees, owing to a 9% rise in its salt business.
Additionally, the Tata Group company’s ‘growth business’ – which houses the Tata Sampann pulses and acquisitions made in the previous quarter – recorded a 20% organic rise in revenue.
The company acquired Capital Foods, the owner of consumer products Ching’s Secret and Smith & Jones, and Organic India, which makes tea and herbal supplements, in the January-March quarter.
Tata Consumer’s smaller rivals Marico and Dabur also reported a pick-up in their revenue in the April-June quarter, suggesting demand has been improving gradually, while rival Nestle missed first-quarter earnings estimates.
($1 = 83.6990 Indian rupees)
(Reporting by Manvi Pant and Ashna Teresa Britto in Bengaluru; Editing by Janane Venkatraman)
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