May 8 - India's Tata Consumer Products forecast double-digit revenue growth in fiscal 2027 on Friday, after beating quarterly earnings estimates, as steady demand for staples such as tea and salt offset cost pressures from the Middle East conflict.
Tea prices were largely benign and coffee prices are starting to ease, which should aid margins, the Tata group company said in an earnings call, while any broad-based fuel inflation would likely be passed on through pricing.
The 'Tata Salt' maker expects earnings before interest, taxes, depreciation and amortization (EBITDA) margin to grow by 50-70 basis points for the current fiscal year, a slower pace than fiscal 2026, which saw an expansion of 100 basis points.
After a prolonged urban-led slowdown, demand has started recovering in India, aided by tax cuts introduced last year aimed at boosting spending. But margins are being impacted for Indian consumer goods makers.
The Middle East conflict disrupted shipping in March, hurting some international and export-led businesses, the Tetley tea maker said.
However, it added that supply chains have normalised since April and risks were contained through alternative sourcing and pricing power.
Its growth portfolio, which includes premium health-focused brands such as Organic India and Tata Sampann, posted 33% revenue growth from a year ago.
The company expects it to expand at about 30% in the near term as it diversifies to reduce exposure to volatile commodity prices.
Peers Dabur and Britannia Industries have turned to price hikes to combat rising commodity prices linked to the Iran war. Higher raw material prices, fuelled by surging crude, are pressuring corporate margins across sectors.
Tata Consumer, which operates a joint venture with Starbucks in India, said fourth-quarter profit grew 21% to 4.19 billion rupees, while revenue climbed 18%, both beating estimates. Quarterly expenses rose about 16%.
Reporting by Urvi Dugar in Bengaluru; Editing by Shreya Biswas
Source: Reuters