Godrej Consumer vs Tata Consumer: With increasing disposable income and a population exceeding 1.4 Billion, the FMCG sector has huge potential to grow in India. Further, the expansion of urban areas is creating a larger demand for packed consumer foods. Here in this article, we shall look at two companies that are operating in the FMCG sector with good earnings and larger market share. We will compare Godrej Consumer vs Tata Consumer. Keep reading to know more.

Godrej Consumer vs Tata Consumer – Company Overview 

Godrej Consumer

Godrej Consumer logo

Godrej Consumer has been in the business for the past 125 years. The company through bringing in innovations has remained competitive in the industry. Godrej Consumer is present in 85 or more countries. Serving a massive 1.2 bn consumers. Godrej Consumer has a greater presence in Asia, Africa, and Latin American continents.

To have a look at some of the most significant pasts that helped them to grow and increase their presence. In 1994 Godrej Consumer bought Goodknight business by paying INR 100 Crores. Later in the year 2010, Godrej Consumer acquires Sara Lee’s stake of 51% by paying INR 1240 crores.

The company owns some of the most brands such as Goodnight, Aer, HIT, Cinthol, Ezee, Nupur, Park Avenue and Kama Sutra.

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Tata Consumer Ltd

Tata Consumer logo

Tata Consumer Ltd is one of the major companies that comes under Tata Group. Tata Consumer stands as the second largest tea company at the global level. Tata Consumer in short is an integrated F&B company expanding its market share in the FMCG sector globally.

Tata Consumer is a vast company with more than 3500 employees. And is able to reach more than 200mn households in India with the help of 3.9mn retail outlets. Tata Consumer believes in strengthening and accelerating more on the core business with constant innovations. Tata Consumer constantly innovates and adds on the products under the portfolio.

Tata Consumer also acquired Organic India, which provides them an opportunity to become a major player in herbal and traditional supplements. Some of the brands owned by Tata consumer include Tata tea, Tetley, Tata salt, Himalayan, Smith and Jones, Chings, and Tata Coffee.

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Industry Overview 

India is a country that is seeing a growth in food processing which has crossed 307.2 billion in terms of market size. And it is set to cross 547.3 billion by 2028 which is a 9.5% CAGR during 2023 – 2028. The government of India supports the FMCG industry in a larger way helping companies to cut down the set-up costs.

The companies under FMCG largely benefited from the advent of E-commerce as it helped them reach a larger crowd without much investment in marketing activities.

The industry is getting a larger support in terms of policy favors. Under the Union budget, USD 976 million was allocated with the aim of reducing import costs and improving competitiveness domestically.

Godrej Consumer Vs Tata Consumer – Financials 

Revenue and Net profits 

The income statement of the Godrej consumer shows a year-on-year (YOY) growth in the revenue from operations. Revenue has increased from 12,276 crores in FY 2022 to 13,316 crores in FY 2023. This results in a revenue growth of 8.47%.

Income statement of Tata consumer shows an increase in the value of revenue from 12,425 crores in FY 2022 to 13,783 crores in FY 2023. This is an year on year (YOY) growth of 10.93%

The table below shows the revenue from operations of the companies:

Fiscal Year Revenue from operations (In crores)
Godrej Consumer Tata Consumer
2023₹13,316₹13,783
2022₹12,276₹12,425
2021₹11,029₹11,602
2020₹9,911₹9,637
2019₹10,314₹7,252

Godrej consumer’s Net profit of the company increased from 1,702 crores in FY 2022 to 1785 crores considering the TTM.

The net profits of the company increased from 1015 crores in FY 2022 to 1320 crores in FY 2023.

Overall, Tata consumer was able to perform better compared to Godrej Consumer in increasing its revenue from operations.

The table below shows the Net profits made by the companies:

Fiscal Year Net Profits (In crores)
Godrej Consumer Tata Consumer
202317021320
202217831015
20211721930
20201497460
20192342457

Profit Margins 

The operating profit margin (OPM) of the Godrej stood at 17.43 % as of FY 2023 which was at 18.55% in the FY 2022. While, operating profit margin of the Tata consumer was at  12.31% which was at 12.30% in the FY 2022.

The net profit margin (NPM) of the Godrej was at 12.79% as of FY 2023 which was at 14.53 in FY 2022.While, Net profit margin of tata consumer  is at 8.77% which was 8.68% in FY 2022 

The operating profit margin and Net profit margins of Godrej was reduced compared to previous years and Tata consumers has maintained the consistency without any reduction in it.

The below table shows the comparison of Operating profit Margin (OPM) of the companies:

Fiscal Year Operating Profit Margins
Godrej Consumer Tata Consumer
202317.43%12.31%
202218.55%12.30%
202120.11%11.89%
202020.06%11.79%
201919.99%10.86%

The below table shows the comparison of Net Profit Margin (NPM) of the companies:

Fiscal Year Net Profit Margins
Godrej Consumer Tata Consumer
202312.79%8.77%
202214.53%8.68%
202115.60%8.57%
202015.10%7.26%
201920.67%6.53%

Return Ratios 

The Return on Equity (ROE) of Godrej Consumer in FY 2023 is at 13.43%. Return on Capital Employed (ROCE) in FY 2023 is at 16.35%.

Over an average of 3 years the Return on Equity(ROE) is at 16.76% and Return on Capital Employed(ROCE) is at 17.96%.

The Return on Equity (ROE) of Tata Consumer in FY 2023 is at 7.70%. Return on Capital Employed (ROCE) in FY 2023 is at 9.70%.

Over an average of 3 years the Return on Equity(ROE) is at 7.33% and Return on Capital Employed(ROCE) is at 9.17%.

The table below shows the comparison of Return on Equity of the companies:

Fiscal Year Return on Equity (ROE)
Godrej Consumer Tata Consumer
202313.43%7.70%
202216.99%7.28%
202119.85%7.02%
202019.74%6.63%
201931.52%6.62%

The table below shows the comparison of Return on capital Employed of the companies:

Fiscal Year Return on Capital Employed (ROCE)
Godrej Consumer Tata Consumer
202316.35%9.70%
202218.37%9.20%
202119.16%8.62%
202017.51%9.38%
201919.09%9.33%

Leverage Ratios 

The debt to equity ratio of Godrej Consumer is low at 0.11 in the FY 2023. The debt of the company is seen reduced from 0.17 as of FY  2022 to 0.11 in FY 2023.

The interest Coverage ratio stands at 12.32 times as on FY 2023. Over an average of 3 years, the Interest Coverage ratio stood at 15.69 times.

The debt to equity ratio of Tata Consumer is low at 0.10 in the FY 2023.The interest Coverage ratio stands at 19.47 times as on FY 2023. Over an average of 3 years, the Interest Coverage ratio stood at 20.19 times.

Overall , Tata consumers seem to have low debt and safe interest coverage ratio.

The table below shows the debt to equity ratio of the companies:

Fiscal Year Debt to Equity
Godrej Consumer Tata Consumer
20230.110.10
20220.170.10
20210.310.11
20200.460.13
20190.510.15

The table below shows the interest coverage ratio of the companies:

Fiscal Year Interest Coverage Ratio
Godrej Consumer Tata Consumer
202312.3219.47
202218.6321.01
202116.1120.09
20208.7214.60
20198.6515.00

Godrej Consumer Vs Tata Consumer  – Key Metrics 

Particulars Godrej Consumer Tata Consumer
CMP₹1,184.0₹1,130.0
Market Cap (In crores )₹121,146.0₹107,670.0
EPS ₹17.4₹12.9
Stock P/E64.884.1
P/B8.366.52
Promoter Holdings 63.20%33.60%
FII holdings 22.90%25.50%

Godrej Consumer vs Tata Consumer – Future Plans

Godrej Consumer 

  • Godrej Consumer is focusing on scaling up household Insecticides in Indonesia and ensuring better performance and growth.
  • Godrej Consumer  Invests consistently in its Research and Development(R&D) section to come up with more innovations.

Tata Consumer

  • Tata Consumer is planning to increase its presence through sales of tea, coffee, salt, and spices which are favored by south Indians to expand in South India.
  • Tata Consumer is ready with a massive 200 new products every year which are set to be launched 
  • Tata Consumer invests more in Research and development to bring in new and innovative products, as a part of which Tata Coffee Gold – 100% freeze-dried coffee was launched.

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Conclusion 

As we are in the conclusion of this article Godrej consumer Vs Tata Consumer, To give a quick brief of the article, Companies overview, Industry overview, Fundamentals of the company were compared and Future outlooks of each of the companies were discussed at the end. Do comment your views in the comment section below.

Written by Nishanth P

By utilizing the stock screenerstock heatmapportfolio backtesting, and stock compare tool on the Trade Brains portal, investors gain access to comprehensive tools that enable them to identify the best stocks, also get updated with stock market news, and make well-informed investments.


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