Tata Consumer FY25 & Q4FY25 Summary: Strong Growth with Margin Recovery on the Horizon

Tata Consumer FY25 & Q4FY25 Summary: Strong Growth with Margin Recovery on the Horizon

Tata Consumer Products (TCPL) reported robust revenue growth in Q4 and FY25, driven by strong traction in both India and international segments. However, profit margins remained under pressure due to tea and coffee inflation. Management commentary suggests margin recovery in FY26, aided by cooling input costs and integration synergies.

📊 Key Financial Highlights

Q4 FY25

• Revenue: ₹4,608 Cr (+17% YoY)
  
  

• EBITDA: ₹625 Cr (-1% YoY); Margin: 13.6% (down 250 bps YoY)
  
  

• Group Net Profit: ₹349 Cr (+64% YoY)
  
  

FY25

• Revenue: ₹17,618 Cr (+16% YoY)
  
  

• EBITDA: ₹2,502 Cr (+8% YoY); Margin: 14.2% (down 110 bps YoY)
  
  

• Net Profit: ₹1,287 Cr (+6% YoY)
  
  

🌍 Segment & Geography Breakdown

India Branded Business

• Volume growth: +5.9% YoY in Q4, +4.5% in FY25
  
  

• India Beverages: Q4 revenue +17% YoY (9% organic); FY25 +10% YoY (3% organic)
  
  

• India Foods: Q4 revenue +27% YoY; FY25 +29% YoY
  
  

International Business

• Q4 revenue +5% YoY; FY25 +7% YoY (5% constant currency)
  
  

• EBIT margin improved 350 bps YoY; focus on cost and mix
  
  

Non-Branded / Commodities

• Q4 revenue +25%; FY25 +20% on strong coffee realizations
  
  

• EBIT growth 63% in FY25 (constant currency)
  
  

💸 Margins & Profitability

• India margins impacted by tea inflation; 290 bps drop in Q4 YoY
  
  

• International margins expanded due to benign input costs
  
  

• Sequential margin improvement seen in Q4 vs Q3
  
  

📊 Financial Ratios (FY25 vs FY24)

📈 Valuation Snapshot @ CMP ₹1160

• P/E: 90x FY25 EPS (₹13)
  
  

• EV/EBITDA: ~40x
  
  

• P/S: ~6.5x
  
  

• P/B: ~6.7x
  
  

• Dividend: ₹8.25/sh proposed; yield ~0.7%
  
  

🔹 Valuations are rich; priced for sustained growth.

📅 Strategic Highlights

• Rights issue of ₹2,980 Cr in FY25 used to repay debt and fund acquisitions
  
  

• Major acquisitions integrated: Capital Foods (Ching's Secret) and Organic India
  
  

• Starbucks JV added 58 stores (total: 479); 5% revenue growth
  
  

• Innovation: 41 new product launches; 5.2% of India sales from new products
  
  

📉 Outlook

Near-Term (FY26)

• Margin recovery expected as tea prices ease
  
  

• Focus on volume growth in India
  
  

• Organic India and Capital Foods to drive portfolio expansion
  
  

Long-Term

• Aim to become top FMCG player in India
  
  

• Scaling foods business, innovating in value-added beverages, and leveraging Tata brand
  
  

• Strengthened balance sheet enables inorganic and organic expansion
  
  

🔹 Bottom Line

Tata Consumer is evolving into a diversified FMCG major with leadership in core staples and high-growth adjacents. Margin pressures in FY25 were transitional. With strong cash flows, brand equity, and strategic focus, the company remains well-positioned for long-term compounding.

Disclaimer: This post is for informational purposes only and not a recommendation to buy or sell securities.