CHENNAI/BENGALURU (Reuters) – India’s Tata Consumer Products reported quarterly earnings above market expectations on Tuesday, as the salt maker’s margins got a boost from price increases it had implemented to counter rising raw material costs.
Global consumer goods companies have raised prices of everything from noodles to salt over the last year to protect their earnings margins even as they face a potential impact on demand from inflation-stung consumers.
Tata Consumer has aggressively raised prices of its salts, with its sales volume holding up well as the consumer goods major also added new variants and rapidly expanded availability across the country.
That helped its revenue from operations climb 11% to 37.34 billion rupees ($448.6 million) in the second quarter ended Sept. 30.
The India business, which makes up two-thirds of its topline and sells salt, tea and coffee in the country, grew 11%, while the international business grew 13%.
Tata Consumer consolidated net profit rose 3% to 3.38 billion rupees, beating analysts’ average estimate of 3.35 billion rupees, according to LSEG data.
“(Core earnings margin expanded) on account of pricing interventions in most of our international markets, softening of commodity costs, and better operating cost controls,” Tata Consumer said in an investor presentation.
Shares in Tata, which Reuters reported last month is in talks to buy at least 51% of popular Indian snack food maker Haldiram’s, closed up 0.8%, taking their gains to 17.4% this year.
Tata’s results come a week after Hindustan Unilever and ITC said competition from smaller rivals had risen as prices of ingredients – which had come off their recent highs – had created a more level playing field.
Separately, Tata Consumer said L. Krishnakumar is retiring as the group’s finance head on Tuesday. ($1 = 83.2444 Indian rupees)
(Reporting by Praveen Paramasivam in Chennai and Ashna Teresa Britto in Bengaluru; Editing by Savio D’Souza)