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Business News/ Companies / Company-results/  Tata Global Beverages net profit up 44%
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Tata Global Beverages net profit up 44%

Total income increased 5% to `1,831.80 crore in the quarter ended 30 June

Tata Global Beverages owns Tata Tea and Tetley brands. Photo: BloombergPremium
Tata Global Beverages owns Tata Tea and Tetley brands. Photo: Bloomberg

Mumbai:

Tata Global Beverages Ltd (TGBL), which owns the Tata Tea and Tetley brands, said first-quarter net profit rose 44% to 111.63 crore, beating analysts’ estimates due to exceptional items.

Profit before exceptional items at 176 crore was 15% higher than the corresponding year-ago period reflecting underlying performance, cost-control measures and reduced losses from investments made in new business ventures, said Harish Bhat, managing director, Tata Global Beverages.

Total income increased 5% to 1,831.80 crore in the quarter ended 30 June, trailing the 1,866.30 crore estimate of seven analysts compiled by Bloomberg. In the year-ago quarter, net profit was 77.69 crore and total income stood at 1,743.73 crore. The net profit estimate by eight analysts was 104.8 crore.

The growth came from countries such as the US, Canada, France, parts of Western Europe, India and South Asia. In a challenging environment, non-branded operations, water, the Starbucks alliance and associate plantation companies contributed to the growth, said Bhat.

“The one market that was very challenging was Europe," he said.

Standalone net profit increased 51% to 84.57 crore from 56.08 crore a year ago. Total income increased an annual 20% to 692.89 crore from 576.84 crore. Volume growth for the tea category in India stood at 2-3% and for water it was in strong double digits, with the Himalayan water brand registering over 30% growth, Bhat said.

In India, the company relaunched Tata Water Plus nutrient water in Tamil Nadu and Andhra Pradesh in a joint venture partnership with PepsiCo India known as NourishCo Beverages Ltd with a new campaign and packaging.

Tata Starbucks Ltd, the 50-50 joint venture between Starbucks Coffee Co. and Tata Global Beverages now has 18 cafes spread across Delhi and Mumbai. Despite the slowdown in the Indian economy, the cafes are “getting good consumer feedback", Bhat said.

It has continued to launch new products globally. For instance, in Poland, Tetley and Vitax launched a range of teas created to be brewed in cold water. In Kuwait, Tetley drawstring teabags were launched with customized blends.

In the fiscal year ended March, Tata Global Beverage’s revenue grew annually 11%, with 50% of the expansion being on account of favourable forex movement, said Vanmala Nagwekar, research analyst at brokerage India Infoline Ltd

The trend will continue in the current quarter with the rupee still declining, Nagwekar said.

Close to 70% of Tata Global Beverage’s revenue comes from outside India. “We believe like FY13, the rupee depreciation against US$ will drive TGBL’s revenues in FY14 as well… We expect TGBL to witness revenue CAGR of 11.2% over FY13-15," Nagwekar said in a 27 June report.

The company informed the BSE on Tuesday that it entered into an agreement with Tata Realty and Infrastructure Ltd for the development of its erstwhile factory property in Bangalore through a special purpose vehicle (SPV).

“The profit from this transaction will be seen in the September quarter," said L. Krishnakumar, executive director, Tata Global Beverages.

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Published: 01 Aug 2013, 04:03 PM IST
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