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Tata consumer Q2 net profit up despite higher costs, weak tea demand

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Tata consumer Q2 net profit up despite higher costs, weak tea demand

Tata consumer Q2 net profit up despite higher costs, weak tea demand

Tata Consumer Products encountered unchanged tea volumes and decreasing revenue in the September quarter as weak demand and surging commodity costs took their toll. To counter this, the company emphasized its salt business, which saw significant revenue increases driven by volume growth and price hikes. Meanwhile, international revenue held steady despite challenges in the UK market caused by weather issues.

Mumbai: Weak tea demand and rising commodity costs are putting pressure on Tata Consumer Products ' core business, prompting the company to lean on salt and newer businesses to sustain growth. Tea volumes remained flat in the September quarter, while unusually hot weather hurt its UK business, even as the consumer goods maker reported double-digit growth in revenue and profit. India tea and coffee revenue declined 1% year-on-year to ₹1,244 crore, with flat volumes amid weak category demand. This decline comes in the midst of broader tepid industry performance, with about 6% drop in overall volumes. Advt

"The overall industry has been soft," chief executive Sunil D'Souza told investors on Monday. " The company raised tea prices by 8-10% between the June quarter and now to offset input cost inflation. According to D'Souza, the increases had covered the inflation so far, but their full impact is yet to reflect in financials. He flagged the buying cycle after the festive season as a factor to watch. Tata Consumer's margin ambitions remain vulnerable to volatility in commodity and operating costs, including oil, packaging, freight and fuel, said D'Souza.


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