Starbucks India Partner Gains as Operating Profit at 5-Year High
Profit from operations before other income, finance costs and exceptional items rose 14 percent to 1.79 billion rupees ($33.6 million) in the three months ended Dec. 31, compared with 1.59 billion rupees a year earlier. Group net income rose 25 percent to 802.6 million rupees, falling short of the average 1.08 billion rupee estimate of six analysts.
The shares rose 3.8 percent to 149.35 rupees at the close in Mumbai, the most since Nov. 15. The stock rallied 78 percent last year, compared with the 26 percent gain in the benchmark BSE India Sensitive Index.
“The operating profit has been better than what the street had estimated,” Srinivasan Viswanathan, an analyst at Angel Broking Ltd., said in an interview today. “The net profit has fallen due to higher taxes in the quarter.” Viswanathan has a neutral rating on the stock.
The company paid 621.7 million rupees in taxes last quarter, compared with 574 million rupees a year earlier.
Tata Global got about 70 percent of its group revenue from outside India in the year ended March 31, according to data compiled by Bloomberg. Tea accounted for 72 percent of total sales, while coffee contributed 27 percent.
Starbucks announced an equal joint venture with Tata Global last year and opened its first store in the country in Mumbai in October.
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