Tata Coffee Q1FY24 results reveal increased income and challenges

Tata Coffee Limited (TCL) today released its standalone and consolidated results for the first quarter ending June 30, 2023, which indicated a rise in total income despite a subdued performance from its Eight O’clock Coffee (EOC) business.

The company’s consolidated total income for the quarter rose to Rs.708 crore from Rs.666 crore in the corresponding period of the previous year. This 6% increase was driven by higher realisations in both the Plantation Coffee and Instant Coffee businesses in India and Vietnam.

Tata Coffee’s operations in Vietnam showed particularly strong sales, with improved profitability resulting from higher sales of premium products. The company reported a robust order pipeline in the region. However, the operating performance of EOC business was adversely affected by lower bag volumes and higher input costs, resulting in a marginal drop in the group’s consolidated profit for Q1FY24 at Rs.62 crore, compared to Rs 65 crore in the previous year’s corresponding quarter.

In terms of standalone results, Tata Coffee reported a total income increase of 7% at Rs.262 crore, compared to Rs.243 crore in the corresponding quarter of the previous year. The rise was primarily due to increased revenues from Coffee Plantations. Tea plantation operations also improved compared to the previous year, benefiting from higher crop production and better realisations. Furthermore, green coffee turnover and profitability saw a rise due to improved prices and product mix.

Chacko P Thomas, Managing Director of Tata Coffee Limited, expressed satisfaction with the company’s performance despite market challenges: “The standalone performance of the company has been very good despite inflation and recessionary trends seen in our markets. Our Coffee Plantation performance was good, aided by improved realizations. The monsoon was deficient during the quarter in our Coffee plantations. Tea plantations performance was robust in the quarter driven by higher crop production & lower cost of production.

“Tata Coffee’s Vietnam operations continue to be robust with a healthy order pipeline and the operations are running at maximum capacity. The profitability of Eight O’clock Coffee [EOC] has been impacted during the quarter due to lower volumes and higher input costs. Overall, it has been a very satisfying performance.”