Tata Consumer Q4 Review - Elevated Tea Prices Curbs Margins; Growth Story Intact: ICICI Direct
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ICICI Direct Report
Tata Consumer Products Ltd. reported a mixed set of numbers with splendid growth in tea, salt and pulses categories.
Revenue grew 26.3% led by robust 59.6% growth in India beverage (tea, coffee and Nourisco) segment and 22.4% growth in consumer foods business (salt, pulses).
International beverages sales remained flat. Non branded business saw growth of 28.8%.
With significant increase (~70%) in tea procurement prices, the company took staggered price hikes.
However, price increases were insufficient to pass on entire cost inflation.
The sharp increase in Indian tea prices led to a 623 basis points contraction in gross margins.
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