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Tag: TCPL

  • Tata Consumer Q2 FY25: Revenue rises, profit margins face cost pressures

    Tata Consumer Q2 FY25: Revenue rises, profit margins face cost pressures

    Mumbai: Amidst an evolving landscape in the fast-moving consumer goods (FMCG) sector, Tata Consumer Products Limited (TCPL) Q2 FY25 results paint a picture of growth tempered by cost challenges. The company’s revenue from operations surged by 13 per cent year-over-year to Rs 4,214.45 crores, driven largely by a stronger performance in the non-branded business segment and international markets. However, cost inflation, particularly in tea prices, and rising finance costs weighed on profitability, leading to a 16 per cent drop in profit before exceptional items and tax to Rs 424 crores.

    The results were significantly influenced by recent acquisitions, including the integration of Tata Coffee Limited and other subsidiaries. While these strategic moves aimed to bolster the company’s portfolio, they also contributed to higher finance and amortisation expenses, impacting margins. “Our focus remains on navigating cost pressures while accelerating growth across key markets,” said Tata Consumer Products, MD & CEO, Sunil D’Souza.

    The company reported an exceptional expense of Rs 27.17 crores for legal, professional fees, and restructuring costs related to these acquisitions, marking an increase from Rs 14.55 crores in the same period last year. Despite these headwinds, a one-time tax credit of Rs 74 crores on the merger of subsidiaries helped support the bottom line, resulting in a consolidated net profit of Rs 367.21 crores, a modest 1 per cent improvement compared to Q2 FY24.

    The Indian branded business segment faced notable pressure, with a 2 per cent growth largely offset by tea cost inflation. Conversely, the international branded and non-branded segments exhibited stronger performance, with growth rates of 5 per cent and 19 per cent, respectively. The non-branded business, which includes plantations and extractions, achieved a notable revenue increase to Rs 462.28 crores. The segment’s profitability improved substantially to Rs 106.13 crores, reflecting better commodity price realisation and efficiency gains.

    Tata Consumer’s recent amalgamations, including Tata SmartFoodz and Tata Coffee, have reshaped its business structure, aiming for operational synergies. The restructuring has also brought significant changes to the company’s debt profile. The debt-to-equity ratio has climbed from 0.09 in Q2 FY24 to 0.14, signalling a rise in leverage due to acquisition-related financing.

    The company’s earnings before interest, tax, depreciation, and amortisation (EBITDA) margin slipped from 12.71 per cent in Q2 FY24 to 11.39 per cent, as cost pressures from raw materials and acquisition expenses weighed heavily. “We are focused on cost mitigation initiatives while ensuring that we invest in our brands and strategic priorities,” D’Souza added.

    Looking ahead, Tata Consumer aims to balance growth with cost containment, particularly in managing the impact of raw material inflation. The FMCG giant is also eyeing expansion in high-potential markets while consolidating its position in core categories.

  • Tata Coffee will merge with Tata Consumer Products Limited

    Tata Coffee will merge with Tata Consumer Products Limited

    Mumbai: Tata Coffee will merge with Tata Consumers Products Ltd ( TCPL). On Thursday The Board of Directors of TCL (Tata Coffee Limited) in collaboration with TCPL acknowledged the conditions under 29 clauses of provisions are fulfilled and stated in regulatory filings. The upcoming merger will be effective from 1 January 2024. It will be a composite scheme of arrangements among TCPL, and TCL.

    As per media reports, TCPL will issue one equity share to existing Tata Coffee shareholders. After demerger or amalgamation TCL will dissolve with the statutory process.

    Tata Consumer Products is known for its quality and innovation. Tata Consumers Limited has different product lines of Coffee, Tea, Salt, Liquid Foods, and beverages. In the last few years, Tata Consumers gave better returns on stock investment.

    This FMCG consolidated business will help Tata Group for its momentum to market share expansion. Tata Consumer Products also has a strong presence abroad in the FMCG segment. According to industry experts, it is likely to add to its earnings by 3-5%. In the next financial year.

    According to the Forbes India report, TCPL is the 8th largest FMCG player in India with a market cap of Rs 0.879 Lakhs Crores.

  • Tata to take over Bisleri

    Tata to take over Bisleri

    Mumbai: Ramesh Chauhan has done it again.  After selling his brands – Thums Up, Maaza, Citra, Gold Spot and Limca to Coca Cola almost three decades back, the 82-year old business tycoon and chairman of Bisleri International has planned to divest his stake in the company to Tata Consumer Products Ltd (TCPL) for an estimated sum of Rs 6,000 – 7,000 crore, as per media reports.

    The reports say that the current management will continue for two years as part of the deal. Bisleri brand’s turnover is estimated at Rs 2,500 crore with profit at Rs 220 crore for FY’ 23, reveal reports.

    Media reports cite that Chauhan’s motive behind selling the brand was the fact that he has no successor to expand and handle the brand. His daughter Jayanti isn’t too keen on taking care of it.

    Ramesh Chauhan-led Bisleri International functions in the segment with bottled water brand Bisleri and spring water Vedica. It is also existent in fizzy drinks with brands – Spyci, Limonata, Fonzo and PinaColada.

    The Tata Group runs its consumer business under Tata Consumer Products Ltd (TCPL) which also sells packaged mineral water under the brand Himalayan, and also has brands such as Tata Copper Plus Water and Tata Gluco+ in the hydration segment.