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Tata Consumer Products — Q3 FY24
Tata Consumer Products delivered a strong Q3 FY24 with consolidated revenue growth of 9% and EBITDA expansion of 190 bps.
bullish
high
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Tata Consumer Products delivered a strong Q3 FY24 with consolidated revenue growth of 9% and EBITDA expansion of 190 bps. India beverages saw tea volume growth of 2% (fourth consecutive quarter of positive volume), while India foods grew 5% volume and 13% revenue. Growth businesses (Sampann, NourishCo, Soulfull, Yumside) surged 42%, now contributing 17% of India business. International business recorded 11% revenue growth with EBIT up 23%. The company closed the Capital Foods acquisition and expects to close Organic India within 45-60 days, targeting integration within 100 days. Management guided for NourishCo to reach INR 900-1,000 crore for FY24 and aims to grow the contribution of growth businesses to 30% with 30% growth post-acquisitions. Risks include U.S. coffee category softness and volatility in coffee prices, which could pressure international margins.
टाटा कंज्यूमर प्रोडक्ट्स ने तीसरी तिमाही में अच्छा प्रदर्शन किया। कुल कमाई 9% बढ़ी और मुनाफा (EBITDA) 190 बेसिस पॉइंट बढ़ा। चाय की बिक्री 2% बढ़ी, लगातार चौथी तिमाही में यह सकारात्मक रही। खाद्य पदार्थों की बिक्री 5% और कमाई 13% बढ़ी। नए व्यवसाय (सांपन्न, नौरिशको, सोलफुल, यमसाइड) 42% बढ़े, जो अब भारत के कारोबार का 17% हैं। अंतरराष्ट्रीय कारोबार में कमाई 11% और मुनाफा 23% बढ़ा। कंपनी ने कैपिटल फूड्स खरीद लिया और ऑर्गेनिक इंडिया को 45-60 दिनों में खरीदेगी। नौरिशको से इस साल 900-1,000 करोड़ रुपये की कमाई का लक्ष्य है। जोखिम: अमेरिका में कॉफी की मांग कमजोर और कॉफी के दामों में उतार-चढ़ाव।
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India Tea Volume Growth
2%
+2% YoY
Fourth consecutive quarter of positive volume growth in India tea.
Growth Businesses Contribution
17%
+4pp YoY
Growth businesses now account for 17% of India business, up from 13% last year.
E-commerce Channel Share
10.7%
+37% YoY
E-commerce revenue grew 37% and now contributes 10.7% of total revenue.
Tata Salt Market Share (Dec)
39%+
+0 bps (MAT)
Record monthly value market share of 39%+ in December 2023.
What Changed vs Last Quarter
NEW
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%.
NEW
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.
NEW
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.
UPDATED
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.
DROPPED
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%.
DROPPED
Innovation contribution of 5% for full year
Innovation contributed 5.5% in Q2, and management guided for a full-year innovation contribution of 5%.
DROPPED
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.
NEW RISK
U.S. coffee category softness and price volatility
The U.S. coffee category is under demand pressure, and coffee prices remain volatile, impacting the branded coffee business.
NEW RISK
Portfolio complexity from multiple brands
Analyst raised concern about overlapping brands (e.g., Sonnets vs Sampann, Himalayan vs Sonnets honey) potentially causing confusion and bandwidth drag.
NEW RISK
Integration risks from recent acquisitions
While integration is progressing, there could be hiccups in distributor transition and inventory cleanup for Capital Foods and Organic India.
RISK GONE
US coffee softness and promotional intensity
US coffee revenue declined due to falling coffee prices and increased promotional activity; corrective actions taken late in Q2 may take time to reflect.
RISK GONE
Rural demand stress and erratic monsoons
Management noted rural stress from inflation and erratic monsoons, impacting volume growth in certain categories.
RISK GONE
Tea market share loss on MAT basis
Tea market share declined 95 bps on a MAT basis, though management highlighted stability on a quarter-on-quarter basis.
RISK GONE
NourishCo growth deceleration due to weather
NourishCo growth slowed to 25% in Q2 from 60% in Q1, attributed to unseasonal rains; analyst questioned sustainability of the aspirational target.
🤫 Topics management stopped discussing
Mentioned in Q1 FY24, Q2 FY24
Tea market share declined 95 bps on a MAT basis, though management highlighted stability on a quarter-on-quarter basis.
Mentioned in Q1 FY24, Q2 FY24
Management expects to complete the merger of Tata Coffee business within the current financial year, pending NCLT approvals.
Fast read
Guidance and risk preview
Management remains confident of delivering INR 900-1,000 crore for NourishCo in FY24, despite Q3 being seasonally weak.
The U.S.
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