Results Highlights (Consolidated):
Revenue from operations up 14% YoY & 5.84% QoQ at ₹5,661.13 Cr Vs (₹4,965.90 Cr YoY & ₹5,348.88 Cr QoQ).
• EBITDA up 16.59% YoY & 8.16% QoQ at ₹783.22 Cr Vs (₹671.78 Cr YoY & ₹724.14 Cr QoQ).
• EBITDA Margin stood at 13.84% Vs 13.53% YoY and 13.54% QoQ.
• Profit after tax up 15.65% YoY & 10.05% QoQ at ₹470.14 Cr Vs (₹406.51 Cr YoY & ₹427.19 Cr QoQ).
• Total branded business up 14.21% YoY & 3.14% QoQ at ₹5,036.29 Cr Vs (₹4,409.86 Cr YoY & ₹4,883.1 Cr QoQ).
• India’s branded business up 17.42% YoY & 3.55% QoQ at ₹3,666.13 Cr Vs (₹3,122.15 Cr YoY & ₹3,540.3 Cr QoQ). And International branded business up 6.40% YoY & 2.04% QoQ at ₹1,370.16 Cr Vs (₹1,287.71 Cr YoY & ₹1,342.8 Cr QoQ).
• Non-Branded business up 11.63% YoY & 32.38% QoQ at ₹658.77 Cr Vs (₹590.16 Cr YoY & ₹497.64 Cr QoQ).
• Growth Businesses (Tata Sampann, Ready-to-Drink, Tata Soulfull, Vending, Capital
Foods, and Organic India), which delivered ₹1,438 crore with a strong 40% YoY
expansion. The India Salt segment contributed ₹1,099 crore, up 15% YoY, while
India Tea/Coffee recorded ₹1,244 crore, reflecting a slight 1% YoY drop.
• Salt volumes grew strongly by 9% YoY (with premium/value-added salt volumes up 17% YoY), while Ready-to-Drink (RTD) registered a 34% YoY volume increase.
• Tata Sampann achieved 57% YoY volume-led revenue growth, and the NonBranded Solubles business expanded volumes by 21% YoY.
• India Tea volumes remained flat YoY as overall category demand stayed subdued, though pricing actions helped narrow the volume-value gap.
Concall Highlights:
TCPL implemented two price hikes in salt to offset persistent inflationary cost pressures and protect margins. Prices were increased from ₹30 to ₹32 per bag in May, followed by a further increase from ₹32 to ₹34 per bag in October.
• TCPL increased tea prices by 8–10% between Q1 and Q2, while weekly cost inflation moderated to 2–3%, indicating potential margin recovery. Despite a 6% decline in industry volumes, TCPL maintained its market share. Management expects revenue growth to outpace volume growth from Q3 onward.
• To capitalise on premium demand and drive growth, TCPL expanded its portfolio through targeted product launches. Key innovations include Gold Reserve for premium consumers, Chakra Select to deepen penetration in southern markets, and Kanan Devan Gold to strengthen its position in the premium tea segment.
• TCPL’s growth businesses grew 40% in Q2, contributing 38% to the India business.
Management reaffirmed its long-term revenue growth guidance of over 30% annually for this segment.
• TCPL requires innovation initiatives to be accretive to margins or generate incremental revenue at existing margin levels. Approximately two-thirds of test launches are successfully scaled up, while underperforming SKUs are discontinued within 6–9 months.
• TCPL’s quick-commerce business is expanding in line with the rapid expansion of major dark-store operators into Tier-2 cities and beyond.
• TCPL will continue to follow an asset-light expansion model across most growth businesses, including Sampann, with a focus on high return on capital employed (ROCE) and capital efficiency.
• TCPL’s growth portfolio, comprising Sampann, ready-to-drink (RTD) beverages, Capital
Foods, Organic India and Soulfull, is expected to maintain a compound annual growth rate (CAGR) of over 30%.
• Growth businesses now contribute 38% of domestic revenue and are expected to consistently outpace the core business over the next three years.
• Management reiterated its full-year growth guidance of 25–30% for Capital Foods and Organic India, anticipating a seasonal demand recovery in Q3 and Q4.
• Restructured distribution pipelines and peak seasonal demand in Q3 and Q4 are expected to accelerate growth for Capital Foods and Organic India.
• The international business reported growth in reported currency terms but declined on a constant-currency basis due to a high base, UK heatwaves and global shipping disruptions.
• Supply chains were disrupted by a 10–12-day strike at Mundra Port in September, along
with vessel rerouting around Africa, resulting in delays in international order fulfilment.
Management expects revenue recovery and margin expansion in international markets
during H2FY27, supported by favourable winter seasonality and easing coffee commodity costs.
• The international business is expected to return to positive constant-currency growth in H2FY27, supported by favourable weather conditions and new account wins.
• TCPL opened seven net new Starbucks stores during Q2, taking its total store count to 505. Management plans to accelerate store openings in H2FY27.
• Starbucks store expansion is expected to accelerate in H2FY27, supported by proven store economics and strong traffic growth of approximately 10%.
• TCPL is deploying a personalised AI-powered sales companion across its salesforce of 1,600 employees, targeting 100% adoption by December. The initiative aims to optimise outlet-level SKU ordering and improve sales coaching.
• An AI voice agent makes automated ordering calls to retailers visited fortnightly, helping smaller outlets maintain adequate inventory and avoid missing weekly replenishment cycles.
• Management reaffirmed its full-year target of 50–70 basis points of consolidated EBITDA
margin expansion and expects H2FY27 margins to outperform H2FY26 levels.
• Management noted that peak tea procurement occurs after Diwali and the Puja season, providing an opportunity to lock in raw material costs while price increases support gross margin expansion.
• The impact of gradual price increases across core tea and salt products is expected to
be fully reflected in H2FY27 financials, supporting margin improvement and widening the gap between value growth and volume growth.
• Non-branded business margins are expected to remain broadly stable at around Q2 levels of approximately 15% during H2FY27, as the impact of seasonal plantation accounting normalises.
• TCPL reiterated its long-term ambition to increase India business EBITDA margins to 17–
20% over the next 3–5 years, supported by operating leverage and scale efficiencies.
• Core tea volume growth is expected to recover to low-to-mid single digits as the impact of price increases stabilises and the peak consumption season begins.
• Supported by four key revenue pillars—Salt, Tea and Coffee, Growth Businesses, and International—TCPL remains focused on delivering double-digit revenue growth and expanding operating margins towards 17–20% over the long term.
Disclaimer:
InCred Markets Limited (“the Company”), Formerly known as Elite Wealth Limited (The company is Wholly Owned Subsidiary of InCred Capital Financial Services Limited) does/ does not do business with companies covered in its research reports. Investors should be aware that the Company may/may not have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only information in making their investment decision and must exercise their own judgment before making any investment decision.
For analyst certification and other important disclosures, see the Disclosure Appendix, or go to www.incredmarkets.com. Analysts employed by the Company are registered/qualified as research analysts with SEBI in India. (SEBI Registration No.: INH100002300)
Disclosure Appendix
Analyst Certification (For Reports)
Vindhyachal Prasad, InCred Markets Limited, vindhyachal@elitestock.com
The analyst(s) certify that all of the views expressed in this report accurately reflect my/our personal views about the subject company or companies and its or their securities. I/We also certify that no part of my compensation was, is or will be, directly or indirectly, related to the specific recommendations or views expressed in this report. Unless otherwise stated, the individuals listed on the cover page of this report are analysts in the Company.
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InCred Markets Limited (Formerly known as Elite Wealth Limited) (IML henceforth), is a SEBI Registered Analyst having registration no. INH100002300, having its registered office at Casa Picasso, Golf Course Extension, Near Rajesh Pilot Chowk, Radha Swami, Sector-61, Gurgaon-122001 Haryana, Telephone: 0120-4477777, and Website: www.incredmarkets.com. There is no material conflict of interest with the subject company. The company and the Research Analyst have no actual or beneficial interest of one percent or more in the subject company.
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