India's Tata Consumer misses profit view as domestic beverages drag

BENGALURU (Reuters) - India's Tata Consumer Products Ltd on Tuesday reported a slightly smaller-than-expected rise in fourth-quarter profit as price hikes failed to offset tepid revenue growth in its domestic beverage business.

The company, which owns the eponymous Tata Tea and Tata Salt brands, said its consolidated net profit rose 23% to 2.69 billion rupees ($32.85 million) in the quarter ended March 31.

Analysts on an average expected a profit of 2.70 billion rupees, according to Refinitiv IBES data.

The company's consolidated revenue climbed nearly 14% to 36.19 billion rupees, led largely by a 15% rise in its India business, beating analysts' view of 35.11 billion rupees.

However, the share of the India business fell to 62% of revenue from 70%, as domestic beverages grew a weak 8% and tea volumes grew a bare 3% consecutively.

The company, which packages spices, pulses and cereals under the Tata Sampann brand, said cost of raw materials grew 11.4% to 13.38 billion rupees.

Tata Consumer Products is among the first consumer goods firms to report results. Earlier in the day, Maggi noodles producer Nestle India reported a near-25% jump in quarterly profit.

Quarterly revenue from Tata's joint venture with Starbucks Corp in India mounted 48%, while the international business that sells brands like Tetley Tea in the United Kingdom and Eight O'Clock coffee in the United States, rose 10.5%.

"We have seen a sequential improvement in international business margins and expect it to normalise by Q1FY24 (the current quarter)," the company said.

Last week, its unit Tata Coffee Ltd reported a near-20% increase in quarterly profit.

Shares of Tata Consumer have fallen 4.24% so far this year.

($1 = 81.8990 Indian rupees)

(Reporting by Hritam Mukherjee and Nandan Mandayam in Bengaluru; Editing by Sohini Goswami)