Tata Coffee

Tata Coffee posted an excellent set of numbers for Q1FY17 purely on operational efficiencies. Net sales for the quarter rose 21% (YoY) at Rs. 407 crore. This was driven by good traction in both its verticals – plantations as well as Value Added Products. The plantation unit which includes cultivation, manufacture and sale of coffee contributes only 21% to the total topline and its EBIT margin improved from 15% to 19%. Value Added Products includes production and sale of roasted and ground and instant coffee products – this unit contributes 79% to the total revenue earned and its EBIT more than doubled from 12.73% to 25.44%.

Along with rise in selling price, lower raw material costs helped, which during the quarter was down 14%. Total operating costs, as a percentage of total revenue was down from 87% to 77%. EBITDA rose 90% at Rs.113 crore and margins jumped up from 16.9% to 26.6%.

The company ended Q1FY17 with a consolidated net profit of Rs.64 crore, up 137% (YoY). On an equity of Rs.18.68 crore, EPS is at Rs.2.44 (FV of Re.1).