Tata Consumers is an A /T+1 group Tea & Coffee company with having Face value of Rs. 1. Tata Consumer Products Ltd. (formerly Tata Global Beverages Ltd) is the second-largest player in branded tea in the world. Tata Consumer Products is engaged in the trading, production, and distribution of Consumer products mainly Tea, Coffee, Water, Salt, Pulses, Spices, Snacks, Ready-to-Eat packaged foods products etc. It is home to well-loved branded businesses which includes - Tata Tea, Tetley, Tata Salt, Eight O’Clock Coffee, Himalayan Water and emerging brands like Tata Sampann, Tata Soulfull, Tata Gluco Plus and Tata Water Plus with their presence in 40+ countries. Company has a joint venture with Starbucks called Tata Starbucks Limited, to own and operate Starbucks Cafe in India which includes 200+ stores and it has recently Launched 71 new stores across 15 new cities and continued expansion into Tier-2 cities. The company also has a joint venture with PepsiCo called NourishCo Beverages Ltd., which produces non-carbonated ready-to-drink beverages and it produces and markets Tata Water Plus - India's first nutrient water, and Tata Gluco Plus - a healthy, glucose-based flavoured drink and Himalayan water. Company also has a presence in the high-growth contemporary 'single-serve' business in the USA through an agreement with Green Mountain Coffee Roasters' Keurig single-serve machines for Eight O'Clock Coffee, MAP Coffee, and with Tassimo in Canada for Tetley tea. Company’s India business contributed to 71% of total branded revenue and 29% revenue was generated from its international business. Company’s E-commerce has continued to grow at a rapid pace in FY 22-23, up 32% year-over-year and its Modern Trade channel grew 21% and increased its share in India Sales to 14%. Company has also driven better outreach among consumers by running hyperlocal campaigns and TV ads for better connect with the audience.

Fundamentals (FY22-23):

Financial Results:

Company’s Net Sales was at Rs 3,741.21 crore in June 2023 up 12.46%, Quarterly Net Profit at Rs. 316.59 crore in June 2023 up 23.93% and EBITDA stands at Rs. 602.78 crore in June 2023 up 22.36% as compared to June 2022. Company’s EPS has increased to Rs. 3.41 in June 2023 from Rs. 2.77 in June 2022.

Key Points:

1. Tata Soulfull, a leading brand in the Better-for-you snacks and Breakfast Cereals segment from the house of Tata, has expanded its snacking portfolio with the launch of Ragi Bites Choco Sticks. With this new launch, the brand is aiming to strengthen its presence in the kids’ segment under its flagship brand, Ragi Bites - a wholesome snacking brand.
2. Tata Consumer Products (TCP) has recently announced ts entry into the premium Kashmiri saffron category under its provenance brand- Himalayan. Himalayan is directly sourcing the Grade 1 Kashmiri saffron, recognized for its purity and quality, from the picturesque valleys of Kashmir. With the launch of Grade 1, 100% pure Kashmiri saffron, the brand Himalayan is extending its existing product portfolio comprising of Natural Mineral water, Honey, and Fruit Spreads into this new category.
3. Tata Soulfull recently announced its lead sponsor partnership with Reliance Retail for the Maha Millet Mela to showcase millet based products including Tata Soulfull products available across more than 400 Reliance stores.
4. Company has recently expanded its ready-to-drink portfolio with the launch of Tata Fruski Juice N Jelly, inspired by local Indian flavours and one-of-its-kind juice-based drink with the added surprise of Jelly, providing a unique taste and feel. It is in line with TCP’s focus to innovate and expand its subsidiary, NourishCo’s existing portfolio which includes Himalayan Natural Mineral Water, Tata Gluco Plus, Tata Copper+ Water, Tata Fruski and the newly introduced premium Himalayan Honey and Preserves range.
5. The company has also entered the health supplements segment with the launch of ‘Tata GoFit’ specially for women. Tata GoFit plant protein powder is a plant -based easy-to-mix product formulated with the goodness of gut-friendly probiotics.
6. TCPL recently rebranded TATA Q (recently acquired from Tata Smart Foods Limited) to ‘Tata Sampann Yumside’, which will be integrated with the Tata Sampann portfolio of food offerings. Based on feedbacks and suggestions the company has reworked its offering and it is also launching new innovations in the ethnic RTE category. The brand is also extending itself to the ready-to-cook (RTC) category with an extensive range of everyday and niche Indian gravies and pastes.
7. The company recently launched Tata Soulfull Masala Oats+ made with the goodness of wholegrain oats, traditional Indian millets such as navane and jowar, desi masalas and real vegetables. It is a good add on to Tata Soulfull’s existing portfolio that includes cereals, wholesome snacks, muesli and plant-based protein drinks. Tata Soulfull Masala Oats+ is available in four delicious variants - Mast Masala, Desi Veggie and Tomato Twist in North, East & West markets; and Mast Masala, Desi Veggie and Peppy Curry for the Southern markets.
8. Company has also marked its entry into the premium Honey and Preserve category under its Himalayan brand. Himalayan Honey comes with NMR (Nuclear Magnetic Resonance) test quality seal to ensure high quality. The honey is being sourced from ‘Pahaadi Utpaad', Tata Trusts’ associate organization that works on promoting traditional bee keeping methods with an objective to source unadulterated mountain honey and establish a mountain honey value chain.
9. Company has also entered the plant-based meat products category, under a new brand ‘Tata Simply Better'. Plant-based meats are at the forefront of the broader plant protein landscape, aimed at replicating the sensory and cultural resonance of animal-derived meat, but without the associated implications for the environment and health.
10. Tata Consumer Products Limited (“TCPL”) recently demerged its plantation business of Tata Coffee Limited (“TCL”) into TCPL Beverages & Foods Limited (“TBFL”), a wholly owned subsidiary of TCPL and the merger of the remaining business of TCL, consisting of its extraction and branded coffee business with TCPL. Additionally, it will also acquire the minority interest in its UK subsidiary, Tata Consumer Products UK Limited (“TCP UK”).
11. TCPL recently launched ‘Shuddh By Tata Salt’' in select regional markets across India which includes Telangana, Andhrapradesh and Karnataka. It is an iodized salt brand which gives consumers access to high-quality branded salt at a reasonable price point.
12. TCPL recently has transmitted its Tata Cha business- a tea café format Quick Service Restaurant (QSR) chain to Qmin-Shops operated by a subsidiary of Indian Hotels Company Limited (IHCL) which enable the company to better focus on its core FMCG business.  Tata Cha currently has 12 stores across Bangalore serving beverages (tea, coffee, coolers), snacks and merchandise. The business is a good strategic fit for IHCL, and can be synergized with their Qmin brand.
13. Company has also signed an Memorandum of Understanding (MoU) with the Indian Institute of Millet Research (IIMR), to unlock the full potential of millets as a healthier and more sustainable alternative to traditional grains.
14. Company has announced sustainability targets and commitments across its operations which includes   100% sustainably sourced critical raw materials by 2040, 100% critical supplier assessments across all geographies by 2030, Increasing the reach of nutrient based product portfolio from 200 mn households to 250 mn by 2030, 100% sustainable products by volume by 2040 as defined by company’s sustainable product index which covers sourcing, manufacturing, wellness, packaging and supplier sustainability and    Net Zero by 2040 across all geographies.

In last 3 Years the stock gave a return of 71.54% as compared to the rise of Sensex and Nifty in the same period.

Company has very good presence and penetrated well in different segments of conumsers as today One in three households in India wakes up to a cup of Tata Tea. Company’s timely forays into new product categories such as Ready to Eat, Ready To cook, plant-based meat products, packaged drinks along with maintaining its strong hold on its legacy business of coffee and tea has helped it to sustain in the market and deliver growth. Company’s JV with Pepsico and Starbucks also helps it to cater a different segment of the society. Company has also successfully maintained its international presence in USA, Canada, Western Europe, UK, Middle East and Australia.  Mutual Funds have also increased its holding by 0.4% to 6.1 recently. Considering company’s wide domestic and international presence backed by its wide range of products from different categories, growth-oriented plans, good financial performance and increasing consumer spendings, company is well poised to enjoy better growth in upcoming future so, investors can invest in this company for long term period.

HET ZAVERI

info@smartinvestment.in

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