• FY net profits drop 48% to INR2.48bn (US$38.7m)
  • Net sales in 12 months to end of March climb by 3% to INR79.9bn
  • Operating profits up 3% to INR6.42bn

Tata Global Beverages has posted a sharp drop in net profits after impairment charges in China and Eastern Europe hit the bottom line.

Net profits dropped 48% to INR2.48bn (US$38.7m) in the 12 months to the end of March, the India-based tea, coffee and bottled water maker said today. However, top line performance was buoyant with FY net sales climbing by 3% to INR79.9bn and operating profits up 3% to INR6.42bn.

The impairment charges in China were over a delay in new technology for "an enhanced product range", Tata said without giving further details. In Russia, charges were also incurred because of an "adverse macroeconomic environment" that affected impairment assessment.

Ajoy Misra, Tata Global Beverages' MD & CEO, said: "We’ve posted steady growth in operating profits despite a very challenging market environment in some parts of the world. We are meeting these challenges through process improvements and a continued focus on brand building and innovation."

The company said its operating profits increase was thanks to a strong performance in its branded business, which helped offset lower profits in the non-branded sector.

In the bottled water segment, Tata Gluco Plus underwent a packaging change and Himalayan natural mineral water launched a sparkling variant.

Misra added: "We see green and speciality tea and newer categories like pods and functional water as drivers for growth. We will continue to invest behind them while also strengthening our core tea markets and sustaining growth in our JVs and strategic alliances."

Tata's share price fell yesterday in the lead-up to today's results. However, despite a further drop this morning, the stocks rebounded slightly before trading closed.

To read the company's full results, click here.