NourishCo to hit INR 1,000 Cr revenue in FY24
Management targets four-digit revenue for NourishCo in FY24, up from INR 600 Cr in FY23.
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NourishCo to approach profitability by end of FY24
NourishCo expected to come close to profitability on a fully loaded P&L by end of this fiscal year.
Tata Coffee integration expected to complete this fiscal year
NCLT process in final stages; integration expected to complete in FY24, with first part (extraction) this year.
Growth businesses to reach 30% of India portfolio
Management reiterated commitment to grow the growth businesses (including acquisitions) from 20% to 30% of the India portfolio, with these businesses growing at 30% CAGR.
Organic India integration to complete in 100 days
Management committed to completing the integration of Organic India within 100 days from the April 16 closure, and is on track.
Capital Foods integration largely complete
Integration of Capital Foods, including channel inventory cleanup, is complete and run rate is trending as expected.
Rights issue to repay bridge debt
The rights issue, expected to close on August 19, will be used to repay short-term bridge financing of INR 3,000 crore raised for acquisitions.
EBITDA margin of 16% by Q3 FY26
Management expects consolidated EBITDA margin to reach 16% by Q3 as lower-cost tea inventory flows in.
Growth businesses to grow 30% from Q2 onwards
NourishCo, Capital Foods, and Organic India are expected to return to 30%+ growth from Q2 FY26.
A&P spend to increase to 7.5-8% of sales
Management plans to step up advertising spend from current ~7% to 7.5-8% in the short to medium term.
NourishCo aspirational target of INR 1,000 crore for FY24
Management reaffirmed the aspirational target of INR 1,000 crore revenue for NourishCo in FY24, despite weather headwinds.
Tata Sampann long-term growth of 30%
Management reiterated the long-term aspiration of 30% growth for Tata Sampann, though Q2 exceeded this at 47%.
Innovation contribution of 5% for full year
Innovation contributed 5.5% in Q2, and management guided for a full-year innovation contribution of 5%.
Merger of Tata Coffee to complete in FY24
Management expects to complete the merger of Tata Coffee business within the current financial year, pending NCLT approvals.
NourishCo to return to 25-30% growth by end of Q3 FY25
After re-indexing pricing on Tata Gluco+, management expects the ready-to-drink business to resume its normative growth trajectory by the end of the current quarter.
Innovation to sales ratio to exceed 5% for full year FY25
The company is on track to deliver innovation as a percentage of sales above 5% for the full year, with Q2 at 4.1%.
Further tea price increases expected
Staggered price increases have been actioned and more are planned to mitigate the 30% tea cost inflation, though full pass-through depends on competitive dynamics.
Structural margin improvement over the long term
Management reiterated commitment to improving EBITDA margins year-on-year, supported by new acquisitions and operating leverage, though near-term tea cost volatility is a watch-out.
Consolidated EBITDA margin target of ~15% by Q4 FY26
Management expects to reach ~15% EBITDA margin by Q4, implying 130-160 bps expansion from current 13.6%, barring coffee cost headwinds.
India tea gross margin to remain in 34%-36% range
Tea gross margins will be maintained at 34%-36% to balance profitability and market share; pricing adjustments will be made as needed.
Growth businesses to continue 30% growth trajectory
The 30% of portfolio growing at 30% is expected to sustain in the near term, driven by low penetration and distribution expansion.
U.S. coffee price increases in January and possibly March 2026
Price increases announced for January 2026; a second round may be needed in March to normalize margins, subject to coffee cost and tariff evolution.
NourishCo to achieve INR 900-1,000 crore revenue in FY24
Management remains confident of delivering INR 900-1,000 crore for NourishCo in FY24, despite Q3 being seasonally weak.
Growth businesses contribution to reach 30% growing at 30%
With the addition of Capital Foods and Organic India, management targets growth businesses to contribute 30% of India business, growing at 30%.
Integration of Capital Foods and Organic India within 100 days
Capital Foods front-end integration substantially complete; Organic India expected to close in 45-60 days, with full integration within 100 days.
International margins to be accretive to India business
Management expects international business margins to improve and become accretive to overall margins, with U.S. showing progress in 6-12 months.
Tea margin pressure to ease from Q4 FY25
Management expects Q3 to be the peak of tea margin pressure, with gradual improvement as price hikes flow through and new crop arrives in Q1 FY26.
Capital Foods and Organic India acceleration in Q4
After stabilization, focus shifts to accelerating growth with innovation and expansion into food services and pharma channels, expecting a substantial jump in Q4.
Growth businesses to contribute 30% of portfolio
Target for growth businesses (Sampann, Soulfull, etc.) to grow at 30% and contribute 30% of portfolio; currently at 27% contribution with 89% growth.
Pharma channel expansion for Organic India
Piloted in 10 cities, pharma channel to expand to 40 cities next year, driving significant uplift for Organic India.
EBITDA margin target of 14.5-15% by Q4 FY26
Management expects to exit Q4 with EBITDA margins in the 14.5-15% range, driven by scale and portfolio mix.
Long-term EBITDA margin aspiration of 17%+
Over the longer term, management targets EBITDA margins above 17% for the India foods business.
Growth businesses to continue 30% growth trajectory
Management expects growth businesses (Sampann, RTD, etc.) to maintain around 30% growth, though quarterly variations may occur.
International margins to normalize in one quarter
US coffee price increases have been passed on; margins expected to normalize in about one quarter.
Growth businesses to be 30% of India portfolio growing at 30%
With Capital Foods and Organic India, growth businesses (NourishCo, Soulfull, etc.) are expected to account for 30% of India revenue and grow at 30%.
Capital Foods integration in 100 days
Capital Foods acquisition closed Feb 1, integration targeted for completion by end of April (100 days). 95% of distributors already billing.
Organic India integration in 100 days
Organic India acquisition closed April 16, integration targeted for completion in 100 days.
Rights issue to conclude by early Q2 FY25
The rights issue process is on track and expected to conclude by early Q2 FY25.
EBITDA margin recovery to ~16% by Q2/Q3 FY26
Management expects EBITDA margins to normalize to ~16% as tea costs soften with a normal crop, with recovery starting by end of Q2 FY26.
Growth businesses to grow at 30% CAGR
Sampann, Soulful, and other growth businesses are expected to continue growing at ~30% annually, maintaining their 30% revenue contribution target.
Capital Foods and Organic India to grow at 30%
Management remains confident of 30% revenue growth for Capital Foods and Organic India in FY26, with margins in line with business case.
Capex to remain at current year levels as % of revenue
Capex for FY26 will be similar to FY25 levels, with no significant new investments; Vietnam capex continues into H1 FY26.
Double-digit revenue growth in FY27
Management expects consolidated revenue to grow at double digits, with EBITDA growth ahead of revenue.
50-75 bps EBITDA margin expansion in FY27
Full-year EBITDA margin expected to expand by 50-75 basis points over FY26, despite A&P normalization.
A&P spend to normalize to 7.5-8.5% of sales
Advertising and promotion spend will be in the 7.5-8.5% range going forward, up from 6.7% in FY26.
Growth businesses to sustain ~30% growth
Growth businesses (Sampann, NourishCo, Capital Foods, Organic India) expected to continue growing at around 30% in the near term.