Tata Consumer Products' Q4 Revenue Miss Sends Shares Tumbling

Tata Consumer Products Ltd., the owner of Tetley tea and Ching's Secret noodle brands, reported a 22.5% drop in its Q4FY24 net profit to ₹267.7 crore compared to ₹345.6 crore in the corresponding period last year. The company's revenue from operations increased 8.5% to ₹3,927 crore, but fell short of analysts' estimates. The announcement of the Q4 results caused Tata Consumer's share price to fall over 5% on the BSE in Wednesday morning trade.

For the full fiscal year ended March 31, 2024, Tata Consumer's consolidated net profit was ₹1,215.4 crore, while consolidated revenue from operations was ₹15,205.85 crore. The Tata Consumer board has declared a final dividend of 775% for FY24.

Despite the quarterly blip, Tata Consumer's stock has outperformed the equity benchmarks in the last one year, gaining nearly 68%. Brokerage firms like ICICI Securities and Nuvama Wealth Management remain positive on the stock's performance, citing the company's growth businesses and acquisition of Capital Foods and Organic India. They have target prices of ₹1,360 and ₹1,400, respectively, for the stock.

Why this matters: Tata Consumer Products is a major player in the Indian consumer goods market. The company's quarterly performance and stock price movements are closely watched by investors and analysts as an indicator of the health of the consumer sector and broader economy.

CEO Sunil D'Souza highlighted Tata Consumer's expansion of sales and distribution infrastructure, with a reach of 4 million outlets as of March 2024, and the strong growth in alternate channels like modern trade and e-commerce. The company also saw good performance in its coffee business and the R&D company Nourishco. Tata Starbucks expanded into six new cities and added 29 net new locations, reaching a total of 421 stores across 61 cities. However, the 22.5% drop in Q4 net profit to ₹267.7 crore, which was below estimates, led to a negative market reaction with the stock trading down 5% Wednesday morning.

Key Takeaways

• Tata Consumer Q4FY24 net profit down 22.5% to ₹267.7 cr, revenue up 8.5% to ₹3,927 cr
• FY24 consolidated net profit ₹1,215.4 cr, revenue ₹15,205.85 cr; final dividend 775%
• Stock has outperformed equity benchmarks by 68% in last year, brokerages remain positive
• Expansion of sales and distribution, strong growth in modern trade and e-commerce
• Q4 net profit miss led to 5% stock price drop on Wednesday morning