Indians shower love on Tata Starbucks, boost profit to Rs 10.25 cr

Tata Group’s joint venture with Starbucks Coffee has significantly raised its operating profit to Rs 10.25 crore from Rs 3.84 crore a year back, during fiscal 2018 when the premium cafe chain touched a milestone of 100 stores. Despite a 2.6 times growth in operating profit, the bottomline is still at a loss of Rs 15.23 crore, the highest for any loss making JV of Tata Global and marginally lower than the previous year’s level of Rs 16.13 crore, parent Tata Global Beverages disclosed in its annual report released on Tuesday.

The other domestic joint venture, NourishCo Beverages Ltd, a partnership with global beverages major PepsiCo, has turned around with a small profit of Rs 36 lakh in the last fiscal against a loss of Rs 10.46 crore in fiscal 2017. “Tata Starbucks’s sales increased 28%, driven by better in-store performance coupled with new stores added during the year. For the first time since inception, the company recorded a positive Ebitda,” Tata Global Beverages said about its JV Tata Starbucks Pvt Ltd.

Ebitda is an acronym for earnings before accounting for interest, tax, distribution and amortisation.

In terms of loss, Amalgamated Plantations Pvt Ltd, that manages the tea plantations in the north-eastern India, stands second with a negative bottomline of Rs 10.82 crore.

NourishCo Beverages has reported 8% rise in sales driven by growth across its portfolio brands like Tata Gluco Plus, Tata Water Plus and Himalayan mineral water.

“The growth has been aided by achieving improved volume through distribution expansion. For the first time since inception, the company is close to break even levels due to improved sales and structural improvements to the cost base by reducing logistics and manufacturing costs,” Tata Global said in its annual report.

Elsewhere in the report, NourishCo disclosed profit of Rs 83 lakh.

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During the year, Tata Global has raised its exposure in terms of loans and bank guarantees by Rs 10 crore to Starbucks JV while no investments were made to NourishCo.

“On its fifth anniversary in India, Tata Starbucks - a joint venture between Starbucks Coffee Company and TGB - crossed a milestone of 100 stores in the country.

“On its fifth anniversary in India, Tata Starbucks - a joint venture between Starbucks Coffee Company and TGB - crossed a milestone of 100 stores in the country,” the company said.

By Sumit Moitra, DNA India