TGBL expects merger of Tata Chemical’s consumer business this year
Tata Global Beverages Ltd (TGBL), which reported 11.61 per cent rise in consolidated net profit at Rs 149.11 crore in Q1 said it expects to complete the merger of consumer business of Tata Chemicals in latter part of this year.
In May, Tata Group had said it would merge the consumer business of Tata Chemicals with Tata Global Beverages, which sells tea brands like Tata Tea and Tetley.
“Our intent is to be a broader FMCG company in India. We are currently focusing on completing merger formalities for the foods business of Tata Chemicals. We are in the process of getting necessary approvals and expect the process to be completed in latter part of the financial year,” Tata Global Beverages Chief Financial Officer L Krishnakumar told PTI.
The company posted 11.61 per cent rise in consolidated net profit at Rs 149.11 crore in the first quarter ended June 30, 2019.
The company had reported a net profit of Rs 133.60 crore in the year-ago period, it said in a release.
Its total income rose to Rs 1927.66 crore, as against Rs 1,831.11 crore in the year-ago period.
The company said revenue from operations grew by 5 per cent aided by improvements in both branded and non- branded businesses, while the profit before tax was up 3 per cent.
“While profits of international and non-branded were higher, profits in India were lower due to higher commodity costs and increased spends behind brands,” it said.
Its total expenses were at Rs 1696.57 crore, against Rs 1595.88 crore.
Revenue from the tea segment stood at Rs 1372.63 crore, compared with Rs 1314.31 crore last year, while earnings from the coffee segment were at Rs 283.02 crore as against Rs 291.66 crore in the corresponding quarter last fiscal.
The total branded business stood at Rs 1661.69 crore during the quarter under review while the non-branded business was at Rs 242.92 crore.
“The company clocked steady revenue and profit growth in the last quarter. The India business recorded continued value and volume growth. Our flagship brands in India recorded a double digit growth and we will increase our focus on white space markets and the opportunities they present,” Tata Global Beverages Managing Director and CEO Ajoy Misra said in the statement.
“Our international markets have recorded a mixed performance with volume growth in the UK, USA and Canada despite competitive intensity. We will further strengthen our innovation agenda across markets in addition to investing behind our core brands. Our JVs have performed well and have posted good revenue growth in the quarter,” he added.
During the quarter, the India tea business clocked an 8 per cent volume growth and 7 per cent value growth.
Flagship brands Tata Tea Premium, Agni and Spice Mix saw double digit value growth, led by focused promotions, it said.
The TGB tea packing unit with 36 million kgs capacity at Tata Steel Special Economic Zone is expected to be operational by end of 2020.
Tata Starbucks that has has 151 stores spread across 8 cities in the country, clocked a 23 per cent growth in revenues for the quarter.
NourishCo, the JV between the company PepsiCo India recorded a total income growth of 8 per cent during the quarter, with continued focus on the national rollout of Tata Gluco Plus, it said adding that the product was recently rolled out in West Bengal, Bihar, Jharkhand and Delhi.
The company in April had said it would acquire branded tea business of Dhunseri Tea and Industries that owns the brands ‘Lalghoda’ and ‘Kalaghoda’in Rajasthan, a market dominated by local players, to grow its branded tea business in India.
“We will initially focus on using Dhunseri’s existing network to scale up the business and then review opportunities in the medium term,” Krishnakumar said.