India's Tata Consumer beats Q3 profit view on price hikes, brand sales
BENGALURU (Reuters) - India's Tata Consumer Products Ltd reported a bigger-than-expected rise in quarterly profit on Thursday spurred by the growth in domestic sales of branded products and price hikes.
The company, which sells Tata Salt and Himalayan mineral water, said its consolidated net profit jumped 33% to 3.52 billion rupees ($42.83 million), in the quarter ended Dec. 31.
Analysts on average had expected a profit of 2.81 billion rupees, according to IBES data from Refinitiv.
Discretionary spending picked up during the quarter as India's retail inflation eased in November and December.
Total revenue from operations rose 8.3% to 34.75 billion rupees, helped by price hikes, the FMCG company said.
The domestic branded business, which accounts for about 62% of the revenue and is home to brands such as Tata Tea, Tetley, and Tata Salt, grew 7.7% during the quarter.
The Tata Group company, which also runs a joint venture with Starbucks in India, said its international business barely grew 2%, hit by currency headwinds and inflationary pressures.
"In our ... core business of salt, we have continued to gain market share despite pricing actions taken to mitigate input cost inflation," said Sunil D'Souza, managing director and chief executive of the company.
The cost of raw materials consumed rose more than 16% in the quarter.
"While the branded tea business in India has been impacted by demand headwinds in some of our key markets, we are putting in place measures to address some of these challenges," D’Souza said.
The demand in the India beverage business is picking up, the company said.
Last week, Tata Coffee Ltd, a unit of Tata Consumer said its quarterly profit slumped 40%, hit by sustained inflation and weak sales of instant coffee in some markets.
Ahead of the earnings, shares of Tata Consumer closed down 0.5%. They rose 3.2% last year.
($1 = 82.1790 Indian rupees)
(Reporting by Anuran Sadhu in Bengaluru; Editing by Dhanya Ann Thoppil)
