(Reuters) -India’s Tata Consumer Products beat quarterly revenue estimates on Wednesday, on higher sales volume and price hikes in its domestic food and beverage segment.
Profit before tax and exceptional items, however, fell 5% year-on-year, due to higher tea prices and acquisition-related expenses.
Prices of tea, which makes up a significant portion of Tata Consumer’s revenue, have risen sharply due to adverse weather conditions and supply chain disruptions, analysts said.
Tata Consumer Products has, in recent years, diversified its portfolio away from tea and salt and invested in distribution to boost sales, according to analysts.
This has aided sales growth despite muted consumption growth in urban India.
The company reported its highest branded business revenue growth in the capital foods and organic segment, which includes packaged noodles and sauces.
Its overall revenue of 46.08 billion rupees ($539.7 million) for the January-to-March quarter was 17% higher than a year earlier and above analysts’ average estimate of 45.74 billion rupees, according to data compiled by LSEG.
The company, known for its ‘Tetley’ tea, said it took “further price increases” after the third quarter hikes across its tea portfolio, while also raising prices in its salt portfolio.
Still, its core profit margin contracted by 250 basis points, with hikes not offsetting the cost inflation.
Profit before tax and exceptional items stood at 4.84 billion rupees in the fourth quarter, compared to 5.09 billion rupees a year ago.
($1 = 85.3770 Indian rupees)
(Reporting by Ananta Agarwal in Bengaluru; Editing by Mrigank Dhaniwala)
