The second quarter earnings season is in full swing, with 44 companies preparing to announce their financial results for the July-September 2024 period this Friday. Notable names to watch include Jio Financial, Tata Consumer Products, ICICI Lombard, and ZEEL.
In addition to these major players, several other companies, such as Advik Capital, Best Agrolife, Duncan Engineering, Hindustan Zinc, Indostar Capital, Manba Finance, L&T Finance, Roselabs Finance, Tejas Networks, and others, will also be revealing their quarterly results.
Expectations for Tata Consumer’s Q2 Results
Tata Consumer Products, a key player in the fast-moving consumer goods (FMCG) sector, is anticipated to report solid growth in its sales for the second quarter. This growth is attributed to strong performance in its new business segments. However, analysts predict a decline in net profit due to higher depreciation and finance costs. According to an average estimate from four brokerages, the net profit for this quarter is expected to drop by 5% compared to the same period last year, while revenues are projected to rise by 15% year-on-year.
Analysts estimate that combined revenues from Capital Foods and Organic India will reach around ₹320 crore. The margins from these segments are expected to exceed the overall consolidated margins due to synergies resulting from recent integrations and pilot projects in the pharmaceutical and food sectors.
In the previous quarter (April-June), Tata Consumer reported an 8% decrease in its consolidated net profit, which fell to ₹290 crore, even as revenues increased by 16% year-on-year.
Research firm Nuvama forecasts that the beverage business in India will see a decline of 4% year-on-year, primarily due to negative volume trends in tea. Conversely, the food segment is expected to experience revenue growth of 14% year-on-year.
In Q2FY25, Tata Consumer likely benefited from older inventory in tea, enabling it to implement price hikes on certain stock-keeping units (SKUs). However, analysts anticipate that tea margins will come under pressure starting in Q3, although a gradual price increase has already begun.
On the international front, Tata Consumer’s business has performed well, with a projected growth of 6% year-on-year in constant currency terms. Analysts also expect improvements in international business margins, particularly due to positive developments in U.S. coffee sales.
For non-branded products, a growth rate of 25% year-on-year is expected, driven by high realizations in coffee. Analysts predict that gross margins will expand by 230 basis points year-on-year to 44.8%, while EBITDA margins will see a modest increase of 10 basis points year-on-year.
Disclaimer: The views and investment tips expressed by investment experts on Sharepriceindia.com are their own and not those of the website or its management. Sharepriceindia.com advises users to check with certified experts before taking any investment decisions.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
