Tata Consumer Products Q3 Results: India business leads margin expansion, Foods aids growth

Shares of Tata Consumer Products Ltd

. gained as much as 4% on Tuesday, January 27, before cooling off, in response to their December quarter results, which were largely in-line with analyst expectations.

Net profit for the period saw growth of 36.3% from last year to ₹384.5 crore, including a one-time labour code impact of ₹23 crore. A CNBC-TV18 poll had projected the figure to be ₹408 crore.

Revenue growth for the December quarter stood at 15% to ₹5,112 crore, marginally higher than the CNBC-TV18 poll of ₹4,980 crore.

Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) stood at ₹721.3 crore, in-line with the ₹699 crore estimate and 27.7% higher than the ₹564.7 crore reported during the same quarter last year.

EBITDA margin expanded by 140 basis points year-on-year to 14.1% from 12.7% last year, also in-line with the CNBC-TV18 poll figure of 14%.

TCPL's foods business saw 19% revenue growth during the quarter, ahead of the expected 12% to 15% growth rate projected by analysts.

Growth in the Foods business was led by 14% growth in Tata Salt, and 45% growth in Tata Sampann. Overall business growth stood at 29%, in-line with the management guidance of 30%.

On the flip side, the company's beverage business grew at 3%, lower than then 5% to 7% that analysts were working with. NourishCo though, saw 26% growth during the quarter, higher than analyst expectations of 15% to 20% growth.

International business revenue growth stood at 11%, at the upper end of the 9% to 11% projected by analysts, but margins narrowed by 170 basis points to 12.3% from 14% last year.

Capital Foods & Organic India saw revenue of ₹354 crore at the end of the quarter, while analysts were working with a figure between ₹350 crore to ₹370 crore.

While the international business margins narrowed, the India business margins grew by over 500 basis points to 12.5% from 7.4% last year. Unbranded business margins narrowed to just 12% from nearly 21% last year.

Shares of Tata Consumer Products have given up most of their post-earnings gains, currently trading 1.3% higher at ₹1,168. The stock is up 21% in the last 12 months.