Tata Consumer Products: COVID-19 situation takes toll on short-term profits

Nidhi Jani
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Tata Consumer Products: COVID-19 situation takes toll on short-term profits

Tata Consumer Products, formerly known as Tata Global Beverages, revealed information on the aftermath of COVID-19 pandemic on its Indian and international operations.

The company's Indian operations were stopped mid-March and partially resumed in the start of April. As the government started easing out the lockdown situation, the company began evolving its structure into new scopes including an innovative supply chain and partnering with e-commerce players to reach the customers directly. In fact, some of the company's other units falling under essentials have been operational throughout, including tea packaging units, pulses, salt and spices.

In terms of its joint venture with Starbucks, the company has now reopened 40 per cent of the outlets, but only for takeaway services. The revenue from another joint venture with NourishCo Beverages has taken a fall as most of the products are being consumed from home. And now, after lockdown and curfew situation has almost been lifted by May end, the company's revenues are slowly returning to normal. Their tea and coffee plantations in India have begun working at full capacity.

In case of its international operations, the company witnessed higher demand for tea and coffee supported by increasing in-house use. Nonetheless, its out-of-home business has been adversely affected in US and Australia.

On the profitability front, company has stated that short-term profitability may suffer because of rising input costs on account of volatile commodity prices and supply constraints.

Tata Consumer Products has recently released its financial numbers for Q4FY20. Its consolidated revenue from operations for the year grew by 33 per cent to Rs 9,637 crore. Consolidated EBITDA for the year rose by 56 per cent to Rs 1,310 crore. Company has also declared a dividend of Rs 2.70 per share for FY20.

Tata Consumer Products' stock opened on BSE at Rs 368 today.

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