Tata Consumer Products Reports 16% Profit Rise Amid Inflation

Tata Consumer Products Ltd reported a consolidated net profit of approximately ₹470 crore for the September quarter (Q2 FY27), a year-on-year increase of roughly 16%. Consolidated revenue rose 14% to ₹5,661.13 crore, supported by an 11% underlying volume growth in the India-branded business and a 40% surge in growth businesses such as Tata Sampann and ready-to-drink beverages.

Chief Executive Sunil D'Souza attributed the growth to a distribution strategy overhaul completed in February that segmented distributors between core products and the growth portfolio. This portfolio now accounts for 38% of India revenue. The company is further diversifying into protein water, functional foods, and nutraceuticals, while deploying artificial intelligence to automate tea leaf quality assessments and optimize sales productivity.

Despite the profit rise, the company faced headwinds. Tea volumes in India remained flat, and revenue in the United Kingdom fell 8% due to a prolonged heatwave. To counter inflation in packaging and freight, the company raised tea prices by 8-10% and increased salt prices. However, commodity inflation in salt narrowed India business margins to 11.1% from 11.5% the previous year. Tata Starbucks provided a bright spot with a 15% revenue increase and a total of 505 stores.

Following the announcement, shares fell 2.84% to ₹936.50 on the National Stock Exchange. D'Souza expressed concern that rising food inflation may be pushing urban and rural demand into negative territories, noting that the overall industry has been soft.