Shares of Tata Consumer Products Ltd. fell 2.26% to Rs 1,124.10 in early trade on April 24, even after the company posted a 59% year-on-year jump in Q4 FY25 consolidated net profit to Rs 345 crore. The stock’s decline comes as investors weighed margin pressures and high input costs against strong topline and bottom-line growth.
Q4 results: Strong revenue and PAT growth
Tata Consumer reported consolidated revenue of Rs 4,608 crore, up 17% YoY from Rs 3,927 crore in Q4 FY24. On a sequential basis, revenue grew 3.7% from Rs 4,444 crore in Q3 FY25. PAT surged 24% QoQ, up from Rs 279 crore last quarter.
India operations brought in Rs 2,937 crore, compared to Rs 2,480 crore in Q4 FY24. International business contributed Rs 1,194 crore, nearly flat sequentially but up 13.5% YoY.
Margins impacted by tea cost inflation
Despite strong growth, consolidated EBITDA declined 1% YoY, largely due to high tea inflation in India and rising coffee costs in the US. The company absorbed 54% of tea cost increases in Q4 to protect volumes and market share.
Managing Director Sunil D’Souza said during the earnings call that while tea prices have started to moderate due to seasonal effects, they still remain 15% higher YoY. He added that margins could normalise by Q1 or mid-Q2 FY26 if input costs stabilize.
Outlook and broker call
Brokerage firm Nomura has a ‘Buy’ rating on Tata Consumer with a target price of Rs 1,300, citing double-digit core business growth, price hike benefits, and an improving margin trend. Nomura forecasts a 13%/18% EBITDA/EPS CAGR over FY25–28 and sees strong upside potential as the company continues to focus on premiumisation and digital channels.
FAQs
Why did Tata Consumer shares fall despite strong Q4 profit?
Investors likely reacted to the 1% YoY dip in EBITDA due to high input costs, particularly in tea and coffee segments.
What was the Q4 PAT for Tata Consumer?
Rs 345 crore, up 59% YoY and 24% QoQ.
What are analysts saying about the stock?
Nomura has maintained a ‘Buy’ call with a target of Rs 1,300, citing long-term growth in core and premium segments.
What affected margins this quarter?
High tea cost inflation in India and coffee costs in the US led to a slight EBITDA decline, despite topline growth.
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