Tata Consumer Products announces results for the quarter and year ended March 31, 2021

Consolidated results:

• Revenue from operations for the quarter at Rs3,037 crore is up 26 percent, and full year at Rs11,602 crore is up 20 percent.
• Consolidated profit before exceptional items for the quarter and tax grew by 6 percent to Rs262 crore, and full year grew by 24 percent to Rs1,342 crore.
• Group net profit for the quarter at Rs74 crore is higher by 161 percent, and full year at Rs930 crore is higher by 102 percent.

Tata Consumer Products (TCPL) today announced its results for the quarter and year ended March 31, 2021.

For the quarter, revenue from operations grew by 26 percent (24 percent in constant currency) as compared to corresponding quarter of the previous year, mainly driven by strong volume and value growth in the India Food and Beverage business. Sequential recovery continued for out-of-home India businesses, ie, NourishCo and Tata Starbucks, notwithstanding the recent headwinds induced by the second wave of Covid. Profit before exceptional items and tax at Rs262 crore is higher by 6 percent, as compared to corresponding quarter of the previous year, mainly on account of tea cost inflation in India and higher investment behind brands, which partly offset the revenue growth and strong control on overheads. Group consolidated net profit is higher by 161 percent as compared to corresponding quarter of the previous year on account of lower exceptional expenditure and improved performance in associates and joint ventures.

Some of the key business updates are:

India

• For the quarter, the India Packaged Beverages business recorded a 53 percent value growth and 23 percent volume growth, driven by robust growth across most brands, that also resulted in market share gains.
• In line with the company’s focus on premiumisation and digital, two premium brands were launched through a D2C model -- Tata Tea 1868, a range of luxury teas (https://www.tatatea1868.com) and Sonnets by Tata Coffee, a premium roast and ground coffee offering (https://tatacoffeesonnets.com).
• Continuing with the hyperlocal theme, brands across the beverages portfolio ran new marketing campaigns and launched festive packaging for Holi.
• For the quarter, the India Foods business registered a 22 percent revenue growth and 18 percent volume growth. This translated to 17 percent revenue growth in Salt portfolio and 26 percent revenue growth in Tata Sampann portfolio for the year.
• During the year, Tata Salt saw market share gains with value-added salts portfolio growing much faster in line with the company's premiumisation agenda.
• Stepping up the momentum on innovation, Tata Sampann portfolio saw five new product launches in the ready-to-cook category during the quarter -- haldi doodh mix, masala daliya khichdi mix, dhokla mix, supergrain ragi idli mix and supergrain ragi dosa mix.
  
• NourishCo sustained strong growth momentum during the quarter with a 86 percent revenue growth, albeit on a low base impacted by Covid in March ’20. Geographic expansion and capacity addition for the business is on track. Tata Water Plus and Tata Gluco Plus both delivered exceptional growth. Tata Fruski, an innovative drink inspired by local street culture, was launched in Hyderabad and Vizag with strong initial response.
• In line with the company’s strategic priority of exploring new opportunities, the Health and Wellness focused foods portfolio was further enhanced through acquisition of Kottaram Agro Foods (brand Soulfull) – now renamed as Tata Consumer Soulfull. This opens significant opportunities in the fast-growing ‘on the table’ and ‘on the go’ segments.
• The integration of the India Foods and Beverages businesses is now complete. A redesigned Sales and Distribution system is in place with digitisation across channel partners; a new integrated business planning system covering demand and supply planning is now live; and ERP integration and migration to SAP4HANA in India is complete. As part of its transformation journey, the company continues to focus on building blocks for the future -- S&D infrastructure, digital, A&P and innovation.

International

• During the quarter, the International Beverages business growth rates slowed owing to pantry loading in the base quarter last year.
• During the year, Tetley grew share in the rapidly growing segments of Decaf, Fruit and Herbal, and Green Tea in the UK.
• Tetley has developed an OOH (out-of-home) range in the UK, relaunched with new product and packaging which is 100 percent recyclable.
• Teapigs, the super-premium tea brand, saw robust revenue growth, largely driven by increased focus on e-commerce channel.
• Eight O’Clock Coffee recorded good growth during the quarter. Innovation momentum continued with good performance of Barista Blends and the K-Cup decaf variant.
• Tetley in Canada recorded excellent growth. It continues to be the No1 brand in the market, with volume leadership in both regular and speciality tea.
• During the quarter, the company divested the entire membership interest in Empirical Group LLC and Southern Tea LLC to the JV partner Harris Tea Company LLC, USA (Harris Tea). This move is in line with TCPL’s focus on its core branded businesses in International markets. It will help further simplify and streamline the company’s operations to enhance business effectiveness and profitability.

Tata Starbucks

• Tata Starbucks recorded revenue growth of 14 percent in Q4.
• It opened 39 new stores and entered seven new cities during the year.
• The year saw new store formats – drive-through and small engine stores and entry into cities of Kochi, Lucknow, Amritsar, Ludhiana, Bhopal, Indore and Kanpur.

Sunil D’Souza, managing director and CEO of Tata Consumer Products, said: “We delivered yet another quarter of strong revenue growth, driven by double digit volume growth in the India business. The integration of our Food and Beverage businesses in India is complete as committed and we have started seeing synergy benefits. During the year, we have stepped up our distribution reach, invested behind our brands and focused on premiumisation in our core portfolio. We continued the momentum in driving the digital agenda with digitalisation of channel partners, implementation of best-in-class ERP and a new integrated business planning system covering demand and supply planning.

“Overall, this year, despite the pandemic, we completed the integration of the India business, made significant progress in our transformation journey and delivered strong earnings growth in the face of unprecedented inflation in a key raw material, while prioritising the safety and well-being of our people. Going forward, we will continue to make consistent progress against all our strategic pillars and create value for all stakeholders.”