Tata Consumer Q1 Results Preview: Margin Likely To Expand On Lower Raw Material Costs

Tata Consumer Products Ltd. is expected to report a solid performance in the first quarter of the current financial year, driven by strategic acquisitions and favourable market conditions.

The consolidated net profit of the Tata Tea maker is likely to grow 9.6% to Rs 351.2 crore in the quarter ended June. The Ebitda margin is projected to widen 50 basis points to 15.1%, according to a consensus estimate of analysts tracked by Bloomberg.

Volume growth is expected to be in the mid-single digits, while the margin expansion is likely due to softening raw-material prices. The consolidation of margin-accretive acquisitions is expected to contribute positively to the company's financial performance, according to brokerages.

Key factors to monitor include tea and coffee prices, the impact of pricing interventions in international markets, and favourable commodity price movements, they said.

• Revenue estimated to rise 15% to Rs 4,309.7 crore versus Rs 3,741.2 crore.

• Ebitda estimated to rise 19% to Rs 649 crore versus Rs 545 crore.

• Ebitda margin expected to be expand to 15.1% versus 14.6%

• Net profit estimated to rise 9.6% to Rs 351.2 crore versus Rs 320.2 crore.

• Revenue for India-branded tea business likely to grow 3% YoY.

• Tea volume growth of 3% YoY.

• NourishCo is likely to continue its strong performance.

• Ebitda margin likely to improve to 15.3%.

• Projects a 12.6% year-on-year organic growth in consolidated revenue.
  13.5% year-on-year growth in India foods business.

• 14% year-on-year growth in NourishCo.

• 12.5% growth in international tea.

• Rs 1,550-crore and Rs 60-crore revenue expected from Capital Foods and Organic India.

• Non-branded businesses expected to report robust growth of over 30%.

• Expects consolidated gross margin to expand 445 to 450 basis points.

• Consolidated Ebitda margin expected to expand 60 bps to 15.2%.