Weak operational performance drags Tata Consumer Products shares down 2%

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February 3, 2023
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Tata Consumer Products topped the Street’s expectations on the revenue and net profit front.

Tata Consumer Products: Tata Consumer Products Q3 profit jumps 26% to Rs 364 crore despite weak operating margin, revenue grows 8%. The FMCG company has recorded a 26% year-on-year growth in consolidated profit at Rs 364.4 crore for quarter ended December FY23 despite weak operating margin, led by tax write-back, exceptional income and higher other income. Revenue for the quarter grew by 8.3% YoY to Rs 3,475 crore with India business growth of 8% and international business rising 4%, however, EBITDA fell 1.7% to Rs 454 crore and margin declined by 130 bps to 13.1% for the quarter.

Shares of Tata Consumer Products fell on February 3, a day after the company reported weak operational performance for the quarter ended December.

Consolidated EBITDA (earnings before interest, taxes, depreciation and amortization) for the company declined 2 percent on year to Rs 458 crore for the quarter. EBITDA margin also witnessed an erosion of 100 basis points from the year ago period in Oct-Dec and came at 13.1 percent.

One basis point is one-hundredth of a percentage point.

The weakness in operational performance for Tata Consumer was on account of demand headwinds for its premium tea business in some key markets and input cost inflation in its salt segment.

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