Tata Consumer Share Price in Focus Post Q1 FY26 Results; Sees No Near-Term US Tariff Risk

Tata Consumer Products Ltd (TCPL), the Tata Group’s FMCG arm and owner of India’s largest tea brand, said its tea margins are likely to improve by the third quarter (October–December) of FY26, supported by declining input costs and a better cost pass-through. The company made the comments during its post-earnings call held on July 23.

Tata Consumer Tea Margins Under Pressure in Q1

In the June quarter, Tata Consumer's revenue from operations rose 10% year-on-year to ₹4,778.91 crore. However, its consolidated EBITDA declined 8% to ₹615 crore, partly due to high tea costs and a correction in coffee prices.

The company’s branded tea segment grew 12% in revenue during the quarter, but operating margins dropped by 10 percentage points. According to CEO Sunil D’Souza, this was largely due to the company being able to pass on only about 70% of the tea price inflation to consumers.

He added that Q2 will serve as a transitional period, and tea margins are expected to return to a more stable 34–37% range by Q3, aided by falling tea auction prices which are currently down 13% YoY and improved cost recovery, as per news reports.

Coffee Margins and Inventory Impact

The coffee segment also faced challenges. Margins in the non-branded coffee business fell sharply to 12% from 22% in the previous quarter due to inventory losses stemming from declining global coffee prices. The company noted this was a trailing impact and is monitoring the situation closely.

Despite these near-term pressures, Tata Consumer continues to guide for a 200–300 basis point improvement in consolidated margins in the coming quarters, as commodity prices stabilise.

Tata Consumer Growth Outlook

Tata Consumer reiterated its expectation of strong growth particularly in its “growth businesses,” which it expects to expand at over 30% in upcoming quarters. This includes segments outside the core tea and coffee verticals, although the company acknowledged some transitional issues in the recently acquired Capital Foods business and headwinds in the Ready-To-Drink (RTD) category.

On the international front, revenue from overseas operations grew 9% to ₹1,074 crore in Q1 FY26, led by a 20% increase in the US coffee business. Despite the ongoing global trade discussions, Tata Consumer said it does not expect any immediate impact from potential US tariff changes, as its exposure remains manageable.

Tata Consumer Products Share Price Performance

Tata Consumer Products Ltd (NSE: TATACONSUM) shares were trading at ₹1,073.60, marking a gain of ₹11.00 or 1.04% from the previous close of ₹1,062.60. The stock opened higher at ₹1,084.00 and touched an intraday high of ₹1,104.50, while the low was recorded at ₹1,065.50. The volume-weighted average price (VWAP) stood at ₹1,083.70, reflecting steady investor interest following the company's Q1 earnings announcement.

Read More: Britannia flags weak demand, rising input costs despite FY25 revenue growth.

Conclusion

Tata Consumer Products remains cautiously optimistic despite margin pressures in its core tea and coffee businesses. While Q1 FY26 reflected the impact of commodity cost fluctuations, the company expects recovery in tea margins by Q3 and sees continued momentum in international and growth segments. Its outlook remains stable with no immediate concerns regarding potential US tariffs.

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