Tata Consumer's India Tea Revenue Falls 4% as Leaf Costs Turn
Tata Consumer Products said India tea volumes grew 2% in the June quarter but revenue fell 4% as it kept passing lower leaf costs to shoppers, even as those same procurement costs have started rising again.
Tata Consumer Products' India tea revenue fell 4% in the June quarter even as volumes rose 2%, the company said, as a year of falling leaf costs starts to reverse.
The Tata Tea and Tetley owner reported the figures on July 24, alongside a 28% rise in consolidated net profit, to Rs 427 crore (about US$44 million) from Rs 334.15 crore a year earlier, and a 12% rise in revenue, to Rs 5,348.88 crore (about US$555 million) from Rs 4,778.91 crore, for the quarter ended June 30. Its India business, which spans tea, coffee, salt and packaged foods, grew revenue 13% to about Rs 3,540 crore, Business Standard reported.
The tea line, the business Tata Consumer grew out of, again gave back price even as it sold more of it. India tea volumes rose 2% in the quarter, but revenue fell 4% as the benefit of lower procurement costs was passed on to consumers, the company said in its results presentation.
Chief Executive Sunil D'Souza said the yearlong decline in tea procurement costs has reversed. "Right now, we are seeing about 7%-10%, I would say, inflation," he said of tea prices on the company's earnings call. The company had "already taken some minor price increases in the month of June," he said, and would "look at judicious pricing to make sure margins are maintained" if the trend persists. Group Chief Financial Officer Ashish Goenka said the price rise and the cost rise have not moved in step: "There has been some timing mismatch, which is also impacting margins." Pratahkal, a Hindi-language business outlet, reported the increase traces to a delayed and irregular monsoon, and that the company is watching the market for 15 to 30 more days before deciding on any further price move.
Away from tea, Tata Consumer's newer categories, including salt, ready-to-eat foods, and the recently acquired Capital Foods and Organic India brands, grew revenue 47% to about Rs 1,314 crore from about Rs 894 crore a year earlier, and now make up 36% of the India branded business, the company said in its results presentation.
Three months earlier, Tata Consumer had reported the same dynamic for the full year to March: tea volumes up 4%, revenue essentially flat, as cheaper leaf reached shoppers rather than the balance sheet. D'Souza was plain about what comes next. "I've stopped trying to forecast tea completely," he said.
Sources: Business Standard, Tata Consumer Products Q1 PAT climbs 28% YoY to Rs 427 cr (July 24, 2026); Upstox, Tata Consumer Products Q1 results: Profit jumps 28% YoY to Rs 427 crore, revenue climbs 12% in June quarter (July 24, 2026); Investing.com, Tata Consumer Q1 FY27 slides: growth businesses surge 47%, margins expand; Investing.com, Earnings call transcript: Tata Consumer posts strong Q1 2026 growth, shares slip; Pratahkal, टाटा कंज्यूमर के उत्पाद हो सकते हैं महंगे, कच्चे माल की लागत बढ़ने पर कंपनी ले सकती है फैसला (July 26, 2026) (hi).