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News: Tata Consumer Products Ltd reiterated its dual strategy at its 62nd AGM regarding organic growth and strategic acquisitions. Management emphasized that future inorganic growth will be depend on nature, alignment with existing portfolio strengths, while organic expansion remains the core focus. With evolving consumer preferences, TCPL is witnessing a shift towards premium, health-conscious, and convenience-led products, fuelling demand for cooking aids, ready-to-drink beverages, and snacking. Regarding Company’s focus on RTD and Value-added Food segment, TCPL’s management-maintained guidance for Ready-To-Drink at 30% revenue guidance during Q4 earnings call citing robust growth and revival post price rejig. Meanwhile, the management also reiterated 30% guidance during the earnings call for Tata Sampann which includes various premium and value-added products such as Pulses, Dryfruits and Cold pressed oils on the back of growing demand for health and premium products. The company also highlighted concerns that 40% of Organic India and 10% of Capital Foods sales are US-driven possibly exposed to US tarriff risk.
View: TCPL's growth businesses witnessed 76% YoY growth (18% organic) in FY25 aided by strong growth across Tata Sampann, Ready-To-Drink and Tata Soulfull. These businesses have scaled have scaled to 3.5-5x of their revenues since FY20 signalling robust growth. Over the years, the contribution of growth business to India business revenues has grown from 6% in FY20 to 28% in FY25 (Inc. chings and Organic India) close to management guidance of 30%. The management in the AGM also reiterated better tea and coffee crop this year while it is monitoring the prices which is also expected to soften aiding the company’s margins ahead. The company has Rs.2818cr of cash in its book thereby possibly funding its acquisitions through internal sources.
Impact: Positive