Tata Coffee has reported a 34 per cent drop in its standalone net profit for the June quarter at Rs 18.74 crore on lower output, higher expenses and finance costs.

The company had posted a net profit of Rs 28.38 crore in the corresponding last quarter. Revenues for the June quarter were up 4 per cent at Rs 168.07 crore against Rs 161.01 crore in the corresponding last quarter.

Shares of Tata Coffee fell during the late trade on Tuesday following the earnings announcement. The Tata Coffee scrip ended two per cent lower at Rs 949.80 on the BSE.

On a consolidated basis, the net profit for the quarter fell by a fourth to Rs 30.31 crore from Rs 40.38 crore. Total income was down per cent at Rs 374.52 crore (Rs 418.46 crore).

The lower profits primarily reflect the lesser crop available for sale in the plantations business, on account of dip in the production of coffee, tea and pepper during the previous season due to unfavourable weather conditions, the company said in a statement.

Instant coffee business

However, the instant coffee business saw good volume growth, aligned to the company’s strategy of driving significant growth of value-added products.

It reported good topline growth with a revenue of Rs 86 crore for the quarter compared with Rs 76 crore in the corresponding last quarter. This growth was driven primarily by higher sales of instant coffee to new geographies. The instant coffee volumes were up 20 per cent at 1,836 tonnes.

Hameed Huq, Managing Director, Tata Coffee, said: "The company’s focus on value-addition and superior offerings is producing good results, as demonstrated by the growth in sales of instant coffee. Our premium value propositions have allowed us to gradually move away from commodity price volatilities. The global instant coffee market is showing steady recovery after a slow-down in some markets. The new capacities we have put in place will help us strongly leverage such growth."

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