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Revenue
₹4,200 Cr
verified against source
Revenue YoY
13%
reported change
EBITDA
Pending
latest reported figure
Source
screener in
record provenance
Actual signal trajectory
Where this quarter sits.
Quarter read
What the record says.
Tata Consumer Products reported a mixed Q2 FY25 with consolidated revenue up 13% to INR 4,200 crore, but EBITDA margin contracted 30 bps to 14.9% due to sharp tea cost inflation (~30% YoY). India beverages revenue grew only 3% with tea volumes declining, while India foods grew 29% (organic 9%, volume 1%). International business continued strong with 7% growth and margin expansion. Growth businesses (NourishCo, acquisitions) grew 15%, below the 30% target, impacted by competitive pricing in ready-to-drink. Management expects recovery in NourishCo and continued momentum in Capital Foods and Organic India. Key risk: if competitive intensity prevents full pass-through of tea cost inflation, margins could remain under pressure.
Colored figures show movement against the previous available record.
Guidance to track
- After re-indexing pricing on Tata Gluco+, management expects the ready-to-drink business to resume its normative growth trajectory by the end of the current quarter.
- The company is on track to deliver innovation as a percentage of sales above 5% for the full year, with Q2 at 4.1%.
- Staggered price increases have been actioned and more are planned to mitigate the 30% tea cost inflation, though full pass-through depends on competitive dynamics.
- Management reiterated commitment to improving EBITDA margins year-on-year, supported by new acquisitions and operating leverage, though near-term tea cost volatility is a watch-out.
Risks flagged
- Tea input costs are up ~30% YoY, but competitive intensity has limited price increases, pressuring India branded margins. Management indicated they will not sacrifice market share for profitability.
- Record high coffee prices are causing demand stress in the non-branded solubles business, which could lead to lower profitability as inventory advantages fade.
- Analyst raised concern about weak demand at Starbucks and across FMCG. Management acknowledged urban stress due to food inflation and delayed government spending, with same-store sales negative.
- Tata Gluco+ lost competitiveness due to delayed price re-indexing versus peers and new entrants like Campa Cola, leading to a 30% premium to competitors. Corrective actions taken but recovery uncertain.
Key quotes
- If one can play the game, two can play the game. So if the game is saying that they will outlast or they will hold on for longer and put stress on the rest of the industry, I would just say rest of the industry, minus Tata Consumer is who's going to feel the stress. I will not forgo market share, because gaining back market share in the longer term is a far more painful and far more expensive proposition.
- I am here for the long haul, and I will not forego market share. We have gone in there, we've made the corrective actions, we've taken down price, and that's why I emphasize the impact was on Tata Gluco+ only.
- In the long run, of course, we'll be looking at structurally improving our margin. Also, we have now tailwinds from the new acquisitions that we made, which comes in at a significant accretion to overall margin play.
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