Tata Consumer Q2 Results: Profit Rises 16% to ₹470 Crore; Revenue Up 14%

Tata Consumer Products’ group net profit increased 16% to ₹470 crore for the quarter ended September, while revenue from operations grew 14% to ₹5,661 crore. The company announced its Tata Consumer Q2 results on October 26.

Profit attributable to equity shareholders was ₹467.23 crore, against ₹397.05 crore in the year-ago quarter, according to the company’s exchange filing. EBITDA grew 18% to ₹794 crore.

Volumes drive the Tata Consumer Q2 results

The EBITDA margin increased by 40 basis points to 14%, driven by 11% underlying volume growth in the India branded business. The company also launched 22 new products during the quarter across health and wellness, convenience and premium categories.

In the first half of FY27, revenue grew 13% to ₹11,010 crore and net profit increased 22% to ₹897 crore. Quarterly profit before tax and exceptional items rose 21% to ₹632 crore, the company said in its investor presentation.

Tata Consumer Products, previously known as Tata Global Beverages, owns brands such as Tata Tea, Tata Salt, Tata Sampann and Tetley. It was renamed in 2020, when the consumer products business of Tata Chemicals was merged into it.

Chief Executive Officer and Managing Director Sunil D’Souza described the period as the company’s “second consecutive quarter of double-digit revenue growth in FY27.” He credited volume-led performance and disciplined execution for the 18% rise in EBITDA.

Growth brands outpace tea

Its growth businesses grew 40% and contributed 38% of India revenue, against 32% a year ago. Among these, Tata Sampann recorded 57% growth, and ready-to-drink (RTD) beverages saw revenue growth of 47% on volume growth of 34%.

Capital Foods and Organic India grew 18% and 9% respectively, and the two brands together posted 24% growth in the Indian market. Their export business was affected by shipping disruptions this quarter, the company said.

Salt remained strong, with revenue up 15% on volume growth of 9% and volumes of value-added and premium salts up 17%. Tea and coffee were soft, with flat volumes and revenue down about 1%, while industry tea volumes were estimated to be down around 6%.

The company has raised tea prices by a cumulative 8% to 10% across the first and second quarters. It noted continuing risks to margins from volatile tea, coffee, packaging and freight costs.

Tata Starbucks, the company’s joint venture with Starbucks, posted revenue growth of 15% and opened seven net new stores, including two Reserve stores. As of September, it had 505 stores across 81 cities.

International revenue increased 7% on a reported basis but fell 2% in constant currency. The UK business dropped 8% in constant currency as a heatwave affected demand, while the US grew 4% and Canada 8%.

What Tata Consumer’s quarter means for FMCG leaders

The rise in Tata Consumer net profit comes as packaged food companies try to balance rising retail inflation and input costs with demand. A larger share of growth from brands such as Tata Sampann has helped offset weak tea sales, though tea still accounts for a big part of its India business.

For FMCG executives, the quarter shows that newer categories and higher-end products can help lift margins when core categories underperform. It also shows the limits of price increases when industry volumes are down.

Management reiterated its guidance of 50 to 70 basis points of EBITDA margin expansion in FY27. It aims for an India EBITDA margin of 17% to 20% over the next three to five years.

The company expects tea and coffee volumes to return to low-to-mid single-digit growth and salt volumes to grow at a mid-single-digit rate. It anticipates growth of 30% or more for Tata Sampann and the RTD business.

After the Tata Consumer Q2 results, key things to watch over the next couple of quarters will be tea prices, the UK recovery and a pick-up in exports at Capital Foods and Organic India. The growth brands, which account for over a third of India revenue, could help the company meet its margin target if they keep growing. Readers can follow more Tata Group company results on CEO Review.