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📊 Tata Consumer Products – Q1 FY26 Results: Steady Topline, Margin Challenges

Lesson 170/173 | Study Time: 10 Min

Course: Quarterly Result Updates & Analysis

📊 Tata Consumer Products – Q1 FY26 Results: Steady Topline, Margin Challenges

📈 CMP: ₹1055
📆 Quarter Ended: June 30, 2025
🏢 Sector: FMCG – Packaged Foods & Beverages

🔍 Executive Summary

Tata Consumer Products delivered a 10% YoY revenue growth in Q1 FY26, driven by strong momentum in India’s core tea and salt categories. However, EBITDA declined 8% YoY due to inflation in tea and coffee input costs. Profit after tax grew 15% YoY on the back of dividend income and better cost controls.

💡 Key Highlights:

India Packaged Beverages up 12%, with coffee revenue surging 67% YoY ☕
Salt revenue up 13%, Tata Sampann up 27%
EBITDA Margin contracted to 12.9% (down 250 bps)
Net Profit stood at ₹332 Cr, up 15% YoY

📈 Consolidated Financial Performance – Q1 FY26

Metric	Q1 FY26	Q1 FY25	YoY Change
Revenue (₹ Cr)	4,779	4,352	+10%
EBITDA (₹ Cr)	615	671	-8%
Net Profit (₹ Cr)	332	289	+15%
EBITDA Margin (%)	12.9%	15.4%	-250 bps
Net Profit Margin (%)	6.9%	6.6%	+30 bps
EPS (Basic) (₹)	3.38	3.02	+12%

📊 Segment & Regional Highlights

Segment	Revenue (₹ Cr)	YoY Growth
India Beverages	1,647	+8%
India Foods	1,534	+14%
International	1,074	+9% (5% CC)
Non-Branded	536	+7%

🇮🇳 India Business: 65% of revenue
🌍 International Business: 35% of revenue

🛒 Omnichannel Distribution:

E-Com +61% 📦
Modern Trade +21% 🛍️
Expansion in Food Services & Pharmacies

🌱 Industry-Specific KPIs – FMCG

KPI	Q1 FY26 Performance
Volume Growth (India)	Tea: +1%, Salt: +5%
RTD Volume Growth	+3% (impacted by weather)
Tata Sampann	+27% YoY
Tata Copper+	+11% YoY
Coffee (India)	+67% YoY
Market Share	Tea -80 bps, Salt -40 bps (YoY MAT)

📉 Margins & Profitability Ratios

Ratio	Q1 FY26	Q4 FY25	Q1 FY25
Gross Margin	Declined (input inflation)	-	-
EBITDA Margin	12.9%	13.4%	15.4%
ROE (TTM)	~11.7%
ROCE (TTM)	~12.4%
P/E Ratio (TTM)	~78x

📊 Growth Trend Visual

🔮 Outlook – FY26 Guidance & Strategic Direction

📆 Near-Term (Next 1–2 Quarters)

Tea cost inflation remains a margin headwind 🫖
Coffee price volatility may impact non-branded business
Capital Foods & Organic India expected to stabilize with improved ad spends

🧭 Long-Term (FY26–FY30)

Focus on health & wellness, premiumization, innovation
Distribution ramp-up across e-com, QSR, pharmacy channels
Growth businesses (Tata Sampann, Soulfull, Organic India) gaining scale
Tata Starbucks added 6 stores, expanding to Tier-2/3 cities

📌 Valuation & FY26 Estimates

Metric	Estimate FY26
Sales Growth	~11–12%
Net Profit Growth	~0 - 5%
EBITDA Margin Target	~13.5%
Fair P/E (Based on FMCG Avg)	35x
Fair Value Estimate	₹457

🔍 Current P/E (~78x) seems fully priced. Scope for rerating only with margin revival and strong volume-led growth.

✅ Conclusion for Long-Term Investors

🟢 Positives:

Strong brand portfolio and innovation-led pipeline
Expanding omnichannel presence and premium segments
Balanced growth across core and new businesses

🔴 Risks:

Margin pressure from tea/coffee inflation
Transitory slowdown in Capital Foods/Organic India
Global market volatility

📌 Investment View: Hold with a Positive Bias
Watch for margin improvement and growth in “growth businesses.”

📢 Disclosure

This analysis is provided solely for informational purposes and does not constitute investment advice. Investors should perform their own due diligence before making investment decisions.

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Piyush Patel

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