Tata Consumer Products Reports Growth in Diversified Revenue Streams

Tata Consumer Products has announced a significant milestone in its first-quarter results for financial year 2027, with revenues from its diversified growth businesses exceeding those from its traditional tea and coffee sectors. According to the company's investor presentation released alongside its June-quarter results, revenues from these growth categories reached ₹1,314 crore, marking a 47 per cent increase from approximately ₹894 crore year-on-year. This figure surpasses the ₹1,234 crore generated from the India tea and coffee business.

The contribution of these growth businesses has risen to 36 per cent of the company's total India business, a notable increase from the 28 per cent reported last year. In recent years, this segment's share has steadily climbed from just 8 per cent in FY21.

The growth businesses include various categories such as Tata Sampann, ready-to-drink beverages, Soulfull, vending, Capital Foods, and Organic India, illustrating Tata Consumer's strategic shift from a reliance on tea products. While tea and salt products remain integral to the company's portfolio, the accelerated growth in packaged foods and health-related items is reshaping its revenue dynamics.

Individual segments have reported encouraging performance with Tata Sampann experiencing a 58 per cent increase in revenue, bolstered by rising demand for products like dry fruits and spices. The ready-to-drink beverages segment also observed a healthy growth of 41 per cent, backed by a 35 per cent increase in volume. Revenue from coffee climbed by 24 per cent, while salt sales increased by 7 per cent.

Conversely, volumes for India tea only increased by 2 per cent, with revenue declining by 4 per cent due to lower costs affecting prices passed on to consumers. Meanwhile, Capital Foods contributed ₹232 crore in revenue, with Organic India generating ₹118 crore. Together, these two brands showcased a gross margin of 49 per cent.

The investor presentation also disclosed initial positive outcomes from restructuring initiatives aimed at enhancing the efficiency of the company's acquired businesses, as well as introducing new products across health and wellness categories. The improved product mix has begun to bolster overall profitability.

Operating profit for the India segment saw a 36 per cent rise to ₹394 crore, compared to ₹290 crore in the same period last year. Furthermore, segment margins increased from 9.3 per cent to 11.1 per cent. At the consolidated level, earnings before interest, taxes, depreciation, and amortisation (EBITDA) margins rose by 70 basis points to reach 13.6 per cent.

The report attributes this growth to a continued emphasis on profitability and disciplined management across various segments. The overall consolidated revenue for Tata Consumer reached ₹5,349 crore, reflecting a 12 per cent increase year-on-year, while EBITDA rose by 19 per cent to reach ₹730 crore. Net profit for the company increased by 29 per cent, reaching ₹427 crore, with a reported underlying volume growth of 13 per cent across its India-branded business.

This latest performance highlights Tata Consumer's long-term strategy to diversify its revenue base, indicating that the company's growth now draws from a broader array of fast-moving consumer goods (FMCG) categories rather than being heavily dependent on its traditional offerings. The achievement of surpassing tea and coffee revenues represents a significant step in the transformation of Tata Consumer's business model.