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Q2 FY25 Comprehensive Analysis - Tata Consumer Products
Sales and Profit Growth
Revenue: ₹4,214 Cr (📈 +13% YoY 🟢)
EBITDA: ₹629 Cr (📈 +11% YoY 🟢)
Net Profit: ₹367 Cr (📈 +3% YoY 🟢)
EBITDA Margin: 14.9% (📉 -30bps YoY 🔴)
EPS (Basic): ₹3.98 (📈 +5.9% YoY 🟢)
PBT (before exceptional items): ₹388 Cr (📉 -16% YoY 🔴)
Segment-wise Sales Data and Growth
India Beverages:
Revenue: ₹1,380 Cr (📉 +3% YoY / -4% organic 🔴)
Tea volumes declined 4% YoY 🔴
India Foods:
Revenue: ₹1,368 Cr (📈 +28% YoY / +9% organic 🟢)
Salt revenue grew 2% with flat volumes; value-added salt +26% 🟢
International Business:
Revenue: ₹1,017 Cr (📈 +7% YoY 🟢)
Ready-to-Drink (RTD):
Revenue: ₹154 Cr (📉 -11% YoY 🔴)
Additional Financial Ratios
Net Profit Margin: 8.7% (📉 -100bps YoY 🔴)
Debt to Equity Ratio: 0.13 (🟢 indicating a low level of debt relative to equity)
Return on Equity (ROE): 11.2% (📉 due to lower net profit growth 🔴)
Current Ratio: 1.85 (🟢 indicating a strong liquidity position)
Return on Capital Employed (ROCE): 14.5% (📈 showing good capital efficiency 🟢)
Asset Turnover Ratio: 1.35 (reflecting efficient asset utilization 🟢)
Peer Group Comparison
Tata Consumer competes directly with FMCG giants like Nestlé India, Hindustan Unilever, and Britannia.
Tata is gaining market share in branded tea, salt, and coffee despite competitors' strongholds in other product categories 🟢.
The acquisition of Capital Foods and Organic India strengthens Tata’s position in the growing health and organic products market 🟢.
Industry Outlook
The global FMCG industry is navigating through commodity price volatility and inflationary pressures, especially in the tea and coffee markets 🔴.
Tea prices surged by 28% YoY, impacting profitability in the beverage segment 🔴.
Despite these challenges, Tata Consumer is expanding internationally and focusing on growth businesses like organic foods and premium beverages 🟢.
Company's Future Outlook
Digital Innovation: Tata is pushing for digital transformation, investing in e-commerce platforms and direct-to-consumer strategies 🟢.
Sustainability Initiatives: Tata Consumer is incorporating sustainability across its supply chain 🟢.
Acquisitions Driving Growth: Capital Foods and Organic India are showing strong QoQ growth of 25% and 45%, respectively 🟢.
Eagle Eye View for Investors
📉 Challenges:
Tea volumes dropped 4% due to rising input costs 🔴.
The RTD segment experienced an 11% decline in revenue due to unfavorable weather 🔴.
💼 Strategic Focus:
Acquisitions driving growth, with Capital Foods and Organic India contributing significantly (📈 25% and 45% QoQ growth 🟢).
Strong focus on digital transformation and sustainability initiatives 🟢.
📅 Looking Ahead:
Focus on merging subsidiaries to boost efficiency 🟢.
Expanding into pharma and food service channels for future growth 🟢.
Tata Starbucks is growing rapidly, now with 457 stores across 70 cities in India 🟢.
📢 Investor Takeaway:
Tata Consumer Products is well-positioned to grow despite challenges in the tea business 🔴. The company is focusing on core segments, acquisitions, and driving innovation in digital and sustainability initiatives 🟢. Expect steady growth in the coming quarters, backed by a diversified portfolio 🟢.
