Tata Consumer Q3 Profit Soars 36% on Strong India Business

Introduction

Tata Consumer Products Ltd. (TCPL) announced a robust performance for the third quarter ending December 2025, with a significant 36.3% year-on-year increase in consolidated net profit. The strong results were primarily driven by impressive margin expansion in its domestic business and sustained growth in the foods portfolio. Following the announcement, the company's shares saw an initial surge of up to 4%, reflecting positive investor sentiment before settling with modest gains.

Stellar Financial Performance in Q3

The company's net profit for the quarter stood at ₹384.5 crore, a substantial rise from the corresponding period last year. This figure includes a one-time impact of ₹23 crore related to labour code changes. Revenue from operations grew by 15% to ₹5,112 crore, marginally surpassing analyst estimates. The performance indicates healthy demand and effective execution across its key markets.

Earnings Before Interest, Tax, Depreciation, and Amortisation (EBITDA) increased by 27.7% to ₹721.3 crore. A key highlight of the quarter was the expansion of the EBITDA margin, which improved by 140 basis points to 14.1% from 12.7% in the same quarter of the previous year. This margin improvement was largely in line with market expectations and signals enhanced operational efficiency.

India Business Emerges as the Growth Engine

The standout performer for TCPL this quarter was its India business, which witnessed a remarkable margin expansion of over 500 basis points, climbing to 12.5% from 7.4% a year ago. This surge underscores the company's strengthening position in its home market and its ability to manage costs effectively. The domestic growth successfully offset some of the pressures seen in the international segment.

Segment-Wise Performance Breakdown

TCPL's diversified portfolio showed varied performance across different segments. The Foods business was a significant contributor to growth, with its revenue increasing by 19%. This was led by a 14% growth in the Tata Salt brand and an impressive 45% growth in the Tata Sampann portfolio. The overall business growth of 29% remained consistent with the management's guidance.

In contrast, the beverage business registered a slower growth of 3%, falling short of analyst projections. However, the NourishCo business, which includes brands like Himalayan water and Tata Gluco+, delivered a strong 26% growth, exceeding expectations.

International Operations and New Acquisitions

The international business reported an 11% increase in revenue, which was at the higher end of analyst forecasts. However, this growth came at the cost of profitability, as international margins contracted by 170 basis points to 12.3%. This suggests rising cost pressures or increased competitive intensity in overseas markets.

Meanwhile, the recently acquired Capital Foods and Organic India contributed ₹354 crore to the quarterly revenue, aligning with market estimates and marking a solid first contribution under the TCPL umbrella.

Q3 FY26 Financial Snapshot

Market Reaction and Stock Movement

On the day of the results announcement, shares of Tata Consumer Products initially jumped 4% before paring some of the gains to close at ₹1,168, up 1.3%. The stock has delivered a return of 21% over the past twelve months, reflecting sustained investor confidence in its long-term strategy and execution capabilities.

Analysis and Outlook

The Q3 results highlight the success of TCPL's strategy to diversify its portfolio and strengthen its domestic operations. The robust performance of the India business, particularly the significant margin improvement, is a major positive. It demonstrates the company's pricing power and cost control measures in its largest market. The strong growth in the Foods segment, powered by brands like Tata Sampann, validates the focus on expanding into higher-growth categories.

However, the narrowing margins in the international business and the sluggish growth in the domestic beverage segment remain key areas to monitor. The company will need to navigate these challenges to maintain its overall profitability momentum.

Conclusion

Tata Consumer Products delivered a strong financial performance in the third quarter, led by its India business. The healthy growth in profit and revenue, coupled with expanding domestic margins, positions the company well for the future. Investors will be watching closely to see if the international business can improve its profitability and if the beverage segment can regain its growth trajectory in the coming quarters.