Tata Consumer Products Q1 FY27 earnings call

Tata Consumer Products Limited reported a strong Q1 FY27, with consolidated revenue growing 12% YoY to ₹5,349 crores. This growth translated into a 19% increase in EBITDA, with margins expanding by 70 basis points to 13.6%. The company's adjusted EPS also saw a significant rise of 25% YoY, reaching ₹4.67 per share. The India business delivered a 13% Underlying Volume Growth (UVG), showcasing robust demand in its domestic market.

The India business demonstrated mixed performance across categories. India tea volumes grew by 2% despite a prolonged summer and LPG shortages, but revenue declined 4% as the company passed on lower tea costs to consumers. Salt, however, delivered strong results with 7% revenue and volume growth, even after a price increase in June, and is nearing a 39% market share. Coffee sales also saw a healthy 24% growth during the quarter.

The company's growth businesses were a key highlight, expanding by 47% YoY to ₹1,300 crores and now contributing 36% to the overall India business. Sampann led this growth with a 58% increase in revenue, driven by broad-based volume growth across its portfolio including core products, dry fruits, and cold-pressed oils. The Ready-To-Drink (RTD) segment also performed strongly, with revenue up 41% and volume growth of 38%, supported by new launches like Kombucha Zero variants.

Capital Foods and Organic India, acquired businesses, collectively grew by 35% YoY. Capital Foods recorded revenues of ₹232 crores with 40% growth, while Organic India contributed ₹118 crores with 27% growth. These businesses maintained a healthy combined gross margin of close to 50%. Management expects these businesses to sustain a 25-30% growth rate going forward^⏳, driven by new launches and expansion into addressable categories.

The international business grew 3% in constant currency and 16% on a reported basis, reaching ₹1,245 crores. The US business was a strong performer with 7% constant currency growth, marking its seventh consecutive quarter of share growth. However, the UK and Canada markets were impacted by an unusually warm summer, particularly affecting the black tea category. The non-branded business saw a 7% decline in revenue (10% in constant currency) due to falling global coffee prices, though proactive hedging helped mitigate some of the impact.

Consolidated EBITDA margins expanded by 70 basis points to 13.6% YoY. While international margins improved due to normalizing coffee prices, India margins saw some contraction due to inflationary impacts and increased A&P spend. The company aims to achieve 50-70 bps margin expansion for the full year, emphasizing judicious pricing actions to pass on cost inflation and leveraging scale. Coffee price deflation was noted as a net positive for the overall business, benefiting branded segments more than it impacted the pass-through non-branded business.

Innovation remains a key focus, with 14 new products launched during the quarter, and a robust pipeline for the rest of the year. These innovations are aligned with three strategic pillars: health and wellness, convenience, and premiumization. The company also continues its focus on sustainability, having been incorporated into the Dow Jones World Index in December 2025 and improving its CRISIL and ESG Risk scores.

The water business, part of the RTD portfolio, has seen strong growth, with volumes growing upwards of 30% and revenue up 41%. Management noted that they had underestimated the growth rates in some parts of the country and are now 'doubling down' on capacity expansion to meet future demand, especially for the next season. The business is primarily strong in Andhra, Telangana, Odisha, and parts of Tamil Nadu, West Bengal, Bihar, and East UP, indicating significant white space for further expansion.