Tata Consumer’s operating profit grew, but tax and other income kept net profit flat
Year-on-year margin improved as expenses grew slower than revenue, while other income still contributed 51.37% of pre-tax profit.
Filed 24 Jul 2026, 15:57 IST · after market close · Tata Consumer Products Ltd (TATACONSUM)
Key takeaways
- Standalone revenue grew 14.15% year on year, while operating profit rose faster at 20.34% and lifted margin by 0.62 percentage points.
- Net profit was nearly flat year on year at +0.04% because the tax rate rose 2.72 percentage points and other income fell 10.56%.
- The stock gained 1.84% after the result, below its 2.94% median absolute move across the last eight result reactions.
Price around the results
Operating profit outpaced revenue in Q1FY27
Tata Consumer Products reported standalone revenue growth of 14.15% year on year, with operating profit increasing 20.34%. Expenses grew 13.35%, slower than revenue, widening operating margin by 0.62 percentage points. The result was less favourable sequentially: expenses rose 4.86% against revenue growth of 3.51%, narrowing margin by 1.13 percentage points.
Other income and tax changes weakened profit quality
Net profit was almost unchanged year on year despite the operating-profit increase, as other income declined 10.56% and the tax rate rose 2.72 percentage points. Other income accounted for 51.37% of pre-tax profit, making reported earnings materially dependent on non-operating income. Sequentially, the lower 11.06 percentage-point tax rate and other income contribution drove much of the increase in pre-tax profit and net profit.
Margin trend turns down after four quarters of improvement
Operating margin had risen from 10.11% in Q4FY25 to 13.15% in Q4FY26 across four consecutive quarters, but fell to 12.02% in Q1FY27. The company’s margin was 3.96 percentage points below the 15.98% median for the six Fast Moving Consumer Goods peers that had reported, placing it second from the bottom.
Management points to expansion and portfolio initiatives
The presentation said Tata Starbucks opened four cafés, including two Reserve stores in Kolkata and New Delhi, extending its premium portfolio. Management said Capital Foods and Organic India were continuing Health & Wellness and Convenience-focused launches, while their go-to-market restructuring initiatives were showing encouraging early results. The company also said Tata Starbucks had relaunched Starbucks Rewards to increase engagement and visit frequency.
Initial market reaction was modest for this stock
The stock rose 1.84% on the initial reaction, with a 2.49% opening gap and volume at 1.41 times the reference level. That move was smaller than the 2.94% median absolute reaction across the last eight results, when the stock rose six times and fell twice. The results were filed after market close.
Q1FY27 at a glance
Standalone figures as filed with NSE — cross-checked against an independent source.
| Line item | Q1FY27 | Q4FY26 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹4,028 cr | ₹3,892 cr | +3.51% | +14.15% |
| Other income | ₹427 cr | ₹-6 cr | — | -10.56% |
| Expenses | ₹3,544 cr | ₹3,380 cr | +4.86% | +13.35% |
| Operating profit | ₹484 cr | ₹512 cr | -5.41% | +20.34% |
| Operating margin (%) | 12.02% | 13.15% | — | — |
| Interest | ₹20 cr | ₹23 cr | -13.58% | -4.76% |
| Depreciation | ₹60 cr | ₹61 cr | -2.61% | +12.23% |
| Profit before tax | ₹832 cr | ₹421 cr | +97.47% | +3.21% |
| Tax | ₹117 cr | ₹106 cr | +10.69% | +27.91% |
| Net profit | ₹714 cr | ₹315 cr | +126.64% | +0.04% |
| EPS (₹) | ₹7.22 | ₹3.18 | +127.04% | +0.00% |
Operating margin of 12.02% compares with a Fast Moving Consumer Goods sector median of 15.98% across 6 peers that have reported Q1FY27.
How the stock reacted
| Window | Stock | vs NIFTY |
|---|---|---|
| Results day | +1.84% | +0.88% |
Volume on the results session was 1.41× its 20-day average.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
Expansion
- Tata Starbucks opened four new cafés, including two Reserve stores in Kolkata and New Delhi.
New initiatives
- Capital Foods and Organic India are continuing Health & Wellness and Convenience-focused launches.
- Capital Foods and Organic India launched GTM restructuring initiatives to drive focus.
- Tata Starbucks relaunched Starbucks Rewards to increase engagement and visit frequency.
What to watch
- Whether operating margin recovers from 12.02% after the 1.13 percentage-point sequential decline.
- Whether expenses grow slower than revenue after rising 4.86% sequentially against revenue growth of 3.51%.
- Whether other income’s 51.37% share of pre-tax profit moderates in the next quarter.