Tata Consumer profit falls 14.86% as other income turns negative
Costs outpaced revenue growth, while a 17.41-percentage-point sequential rise in the tax rate pushed operating margin down to 11.47%.
Filed 26 Oct 2026, 16:39 IST · after market close · Tata Consumer Products Ltd (TATACONSUM)
Key takeaways
- Standalone revenue grew +17.03% YoY, but expenses rose faster at +17.92%, narrowing operating margin by 0.67 percentage points.
- Standalone net profit fell -14.86% YoY as other income turned negative at Rs 41.5 cr and the tax rate rose by 5.66 percentage points.
- Operating margin at 11.47% was 3.54 percentage points below the median of 10 Fast Moving Consumer Goods peers that had reported.
Price around the results
Revenue growth masked weakness in tea and coffee
Standalone revenue grew +17.03% YoY and +4.45% QoQ, but the cost base grew faster in both comparisons. Management said India tea and coffee volumes were flat YoY and category demand remained subdued, with revenue declining marginally despite pricing actions. It also said Tata Starbucks revenue grew 15% on same-store sales growth for the fifth consecutive quarter.
Operating margin has declined for two straight quarters
Expenses rose +17.92% YoY and +5.10% QoQ against slower revenue growth, narrowing operating margin by 0.67 and 0.55 percentage points respectively. The margin fell from 13.15% in Q4FY26 to 12.02% in Q1FY27 and 11.47% in Q2FY27, making this the second consecutive quarterly decline. At 11.47%, it was 3.54 percentage points below the 15.01% median for 10 reporting sector peers.
Other income and tax rate weakened profit quality
Other income was a negative Rs 41.5 cr, equal to -11.71% of profit before tax, compared with Rs 427.14 cr in the previous quarter and Rs 28.5 cr a year earlier. The tax rate rose to 31.51%, up 17.41 percentage points QoQ and 5.66 percentage points YoY, while interest expense increased +29.91% sequentially. These below-operating-line effects helped drive profit before tax down -57.36% QoQ and net profit down -66.01% QoQ.
Starbucks expansion contrasts with subdued core categories
Management said Tata Starbucks expanded to 505 stores across 81 cities, entered Shillong and added two Reserve stores. The company said it enhanced the Starbucks Rewards programme to simplify tiers and improve benefits, while also implementing an AI-led transformation across digital, go-to-market, operations and its project pipeline. Management said Tata Tea Gold Reserve, Chakra Gold Select and Kanan Devan Gold were launched to support premiumisation and market-share gains in targeted markets.
Results were filed after market close
The standalone results were filed after market close, so there is no post-results market reaction to assess yet. After the last eight result announcements, the stock rose seven times and fell once, with a median absolute move of 2.94%.
Q2FY27 at a glance
Standalone figures as filed with NSE — filed ahead of third-party databases, not yet independently cross-checked.
| Line item | Q2FY27 | Q1FY27 | QoQ | YoY |
|---|---|---|---|---|
| Revenue | ₹4,208 cr | ₹4,028 cr | +4.45% | +17.03% |
| Other income | ₹-42 cr | ₹427 cr | — | — |
| Expenses | ₹3,725 cr | ₹3,544 cr | +5.10% | +17.92% |
| Operating profit | ₹482 cr | ₹484 cr | -0.35% | +10.56% |
| Operating margin (%) | 11.47% | 12.02% | — | — |
| Interest | ₹26 cr | ₹20 cr | +29.91% | +4.93% |
| Depreciation | ₹60 cr | ₹60 cr | +1.14% | +8.90% |
| Profit before tax | ₹355 cr | ₹832 cr | -57.36% | -7.82% |
| Tax | ₹112 cr | ₹117 cr | -4.73% | +12.36% |
| Net profit | ₹243 cr | ₹714 cr | -66.01% | -14.86% |
| EPS (₹) | ₹2.45 | ₹7.22 | -66.07% | -14.93% |
Operating margin of 11.47% compares with a Fast Moving Consumer Goods sector median of 15.01% across 10 peers that have reported Q2FY27.
What management said
From the company’s own investor presentation. Each point is checked against the source document before it appears here.
This quarter
- India tea and coffee volumes were flat year on year during the quarter.
- Tata Starbucks revenue grew 15% on strong same-store sales growth for the fifth consecutive quarter.
Expansion
- Tata Starbucks expanded its footprint to 505 stores across 81 cities, including entry into Shillong, and added two new Reserve stores.
New products
- The company launched Tata Tea Gold Reserve, Chakra Gold Select and Kanan Devan Gold.
New initiatives
- The company is implementing an AI-led transformation spanning digital, go-to-market, operations and a project pipeline.
- Tata Starbucks enhanced its Rewards programme with simplified tiers and improved benefits to drive engagement and frequency.
Competition
- The launches were intended to drive premiumization and strengthen market share in targeted markets.
Problems & risks
- India tea and coffee category demand remained subdued during the quarter.
- India tea and coffee revenue declined marginally despite pricing actions narrowing the volume-value gap.
What to watch
- Whether operating margin recovers from 11.47% after two consecutive quarterly declines.
- Whether India tea and coffee volumes move from flat YoY as category demand remains subdued.
- Whether other income remains below the Rs 427.14 cr reported in Q1FY27.