Tata Consumer Q3 results: Profit may rise 25-30%, margin expansion likely

Tata Consumer Products Ltd (TCPL) is expected to report year-on-year (YoY) 25-30 per cent jump in net profit for the December quarter on a 7-12 per cent rise in sales. Margin is seen expanding, both on sequentially and yearly basis.

PhillipCapital in its preview note said TCPL may report a mid-single volume growth for India as momentum in beverages and food business sustained. Gross margin, it said, may see steady improvement led via healthy improvement in International business. Operating leverage benefits and benign raw material cost would flow down at Ebitda level, it said.

This brokerage sees profit for the quarter at Rs 353.90 crore, up 29.50 per cent YoY, compared with Rs 273.20 crore in the same quarter last year. It sees sales rising 12 per cent YoY to Rs 3,891.50 crore from Rs 3,474.60 crore. Margin is seen expanding 137 basis points to 14.4 per cent from 13.1 per cent YoY.

"We model 7.4 per cent YoY growth in consolidated revenues, led by 2.5 per cent volume and 4.5 per cent value growth in domestic tea, 10 per cent YoY growth in the India foods business, 35 per cent YoY growth in NourishCo, mid-single-digit sales growth in international tea and low-to-mid single-digit decline in coffee business - adjusted for consolidation of South Africa JV," said Kotak Institutional Equities.

This broking firm sees profit at Rs 343.10 crore, up 25.6 per cent. It sees sales at Rs 3,731.50 crore, up 7.4 per cent. Ebitda margin is seen at 14.7 per cent, up 160 basis points.

TCPL recently announced acquisitions of Capital Foods and Organic India. Anlaysts said the move suggests a clear intent to build a more comprehensive premium F&B portfolio with high growth potential. Nuvama said the acquisition of Capital Foods pits TCPL directly against Nestle’s Maggi, which leads the branded instant noodles market; competition in noodles and cooking aids may increase going forward, it said.

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