Latest news with #TCPL
Mint
3 days ago
- Business
- Mint
Tata Starbucks profitable at store level, but rapid expansion deepens losses
Coffee chain Starbucks, which operates in India via a 50:50 joint venture with Tata Consumer Products Ltd (TCPL), is seeing store-level profitability, but rapid expansion is hurting its profitability, a top Tata Group executive said. 'While the individual Starbucks stores are indeed profitable, we're currently in an investment phase. This explains the discrepancies you're observing in our financial outcomes," said P.B. Balaji, group chief financial officer of Tata Motors and non-executive director of Tata Consumer Products, while addressing shareholders at the company's 62nd Annual General Meeting on Wednesday. Also read: Europeans grab Indian coffee as exports double in a decade The joint venture, Tata Starbucks Pvt. Ltd, now operates 479 stores across 80 cities, having opened 58 new outlets and entered 19 new cities, including tier-2 markets, in FY25. The company marked a major milestone this year by reaching 100 stores in Mumbai and 50 in Bengaluru. 'We are focused on market expansion at this point, and therefore, there are a lot of store additions happening. Same-store profitability is under control, and most of the losses that you see are because of the expansion we are undertaking," Balaji said. 'The individual stores are profitable, but of course, we are in the investment phase, and therefore, that is the reason why you are seeing the difference." Sunil D'Souza, the managing director and chief executive officer of Tata Consumer Products, also commented on Starbucks' performance, highlighting sequential growth throughout the year. 'The revenue for the year grew by 5%. Growth has improved sequentially, growing 7% in the second half versus 3% in the first half," D'Souza said. Also read: Costa Coffee sees India becoming one of its top-five markets Despite positive unit-level performance, Tata Starbucks posted a ₹135.7 crore net loss in FY25, up 65% from ₹82 crore in FY24. Revenue rose by just 5% to ₹1,277 crore, weighed down by weakness in the quick service restaurant (QSR) sector during the first half of the year. 'The newer stores are still in their gestation phase and haven't turned profitable yet. As a result, they're dragging down overall margins in the short term," said an equity research analyst based in Mumbai, requesting anonymity. TCPL absorbed over ₹67 crore of the total loss, in line with its 50% stake in the venture. The company remains optimistic about the long-term potential of the Starbucks brand in India. 'We remain committed to increasing our store base in India and reaching 1,000 outlets by FY28," it said in its annual filing. Also read: Coffee recall alert: FDA warns of mislabeled ground coffee sold in 15 states—Find out if yours is affected 'Coffee demand is clearly growing in India, especially among young consumers, and Starbucks is well-positioned to benefit from this shift," said the analyst cited earlier. India's coffee retail market is intensifying, with Cafe Coffee Day operating over 430 outlets and Barista Coffee running over 400 stores. Emerging players like Third Wave Coffee and Blue Tokai Coffee Roasters are rapidly expanding their presence across the country.
Mint
4 days ago
- Business
- Mint
Tata Consumer Products keeps its ‘antennas up' for strategic acquisitions
New Delhi: Packaged consumer goods company Tata Consumer Products (TCPL) on Wednesday reaffirmed its commitment to strategic acquisitions to complement its primary focus on organic growth, as it navigates evolving consumer demands for healthy and convenient options. 'We always are in the market. We have our antennas up, and if there's something sensible at the right price, and it fits in well with our portfolio, we will do that,' P. B. Balaji, non-executive non-independent director at TCPL, said while addressing shareholders virtually at the company's 62nd Annual General Meeting (AGM). 'Rest assured, we have a sizeable amount of gunpowder with us, and, therefore, growing organically will be the first focus; inorganic growth will be more bolt-on (acquisition) rather than anything transformative at this point in time, unless of course something dramatically different comes up,' Balaji added. In FY24, the company acquired Ching's Secret maker Capital Foods aside from Organic India. Meanwhile, Balaji said consumer trends in India are evolving with shoppers turning more health conscious. 'Global growth is expected to moderate in the near term, with the IMF forecasting a 2.8% expansion in 2025. India remains one of the fastest growing large economies in the world with a GDP growth estimate north of 6%. Against this backdrop, we are witnessing significant shifts in consumer behaviors and business models. Consumers are becoming more health conscious, seeking 'better for you' and organic options. There's a clear premiumization trend, even in staples,' he said. This is prompting consumers to look for convenience, leading to rising demand for cooking aids, ready-to-drink beverages and snacking. The International Monetary Fund in its April World Economic Outlook report said that India is expected to grow at 6.2% in 2025, and 6.3% in 2026, well ahead of China. It has also forecast India to replace Japan as the world's fourth-largest economy this year. Additionally, the company addressed concerns around the US tariffs given the company's exposure to overseas markets. 40% of Organic India sales are generated in the US, with Capital Foods contributing 10% from the same market. It also sells tea, salt and coffee in the US. 'The tariff will cause some amount of demand stress. From a competitiveness perspective, everybody's equally impacted, so not much on that particular front. We've been holding pretty steady on our Eight o'Clock coffee shares, and in the last two quarters, we're also seeing healthy growth in that portfolio,' he said. TCPL reported consolidated revenues of ₹ 17,618 crore in FY25. However, net profit declined 17% to ₹ 1,252 crore, marking a 17% decline year-on-year. Beyond its flagship tea and salt products, the company sells packaged water, pulses, snacks, coffee, dry fruits, condiments, cereals and spices. The company is actively adapting to the rapidly changing retail landscape, where quick commerce is 'reshaping' distribution; however, physical retail remains important, he said. 'The digital-first marketing and hyper personalization are rewriting the brand playbook. At the same time, artificial intelligence is rapidly transforming every function from demand forecasting, content generation, inventory optimization and pricing intelligence. Companies that embed AI deeply into operations will lead the next phase of value creation,' Balaji said. Currently, e-commerce contributes 13% to TCPL's overall India business. The company is focusing on high-potential emerging channels such as quick commerce, pharmacy and food services to further expand its digital footprint. 'Over the last five years we've launched over 150 products—our innovations to sales ratio has now gone up to 5.2% from the lows of 0.8%. We have quadrupled our direct reach over the past five years to over 2 million outlets with a total reach of 4.4 million outlets. We have strengthened our execution on emerging channels with e-commerce contribution, growing greater than 5x, enabled by the exponential growth in quick commerce,' he said. The company has also been battling high input costs—especially on tea and coffee. The company reported a 1% growth in tea volumes in fiscal 2025. In the March quarter, North India tea prices came off the highs given the lean season, in line with the yearly trend. South India tea prices came off sequentially as well, the company said during its quarterly earnings presentation. 'Inflation last year was sharp, particularly in tea. Our first response in such an environment is to tighten our belts and get our cost savings right. We will be forced to do calibrated price increases, thinking through the entire cycle because you wouldn't want to price yourself ahead of the market and the market completely crashes,' he said. Prices of coffee touched record highs in the March quarter—averages prices were up 97% year-on-year higher for the Arabica variety during the period. He expressed optimism for the upcoming tea and coffee crops. 'The tea crop this year, we believe, is going to be normal and definitely better than last year, and coffee of course, all of us have been watching it, the pricing is volatile and we will need to take a very close look at that, but it looks like the crop could be normal this year. Auction prices of tea are currently equal to last year, and it's expected to soften as the season starts and continues,' he said.
Business Standard
10-06-2025
- Business
- Business Standard
Tata Consumer Products allots 4,368 equity shares
Under TCPL - Share Based Long Term Incentive Scheme 2021 Tata Consumer Products has allotted 4,368 equity shares under the TCPL-Share Based Long Term Incentive Scheme 2021. Consequently, on 09 June 2025, the Paid-up equity shares capital of the Company stands increased from Rs. 98,95,06,778 divided into 98,95,06,778 equity shares of Re. 1/- each to Rs. 98,95,11,146 divided into 98,95,11,146 equity shares of Re. 1/- each.
Time of India
27-05-2025
- Business
- Time of India
India remains bright spot of economic growth amidst volatile global environment: N Chandrasekaran
Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads India remains "one of the bright spots of economic growth" amidst a volatile global economic environment, said Tata Consumer Products Ltd (TCPL) Chairman N Chandrasekaran in the company's annual report. Chandrasekaran, who is also the chairman of Tata Sons and Tata Group, said the group would have a lesser impact from the new US tariff regime under the Trump administration."India's direct exposure to the US is limited as its goods exports to the US are just over 2 per cent of its GDP, one of the lowest among emerging markets," he said while addressing the shareholders of Tata Group FMCG arm stated that India's long-term growth is underpinned by strong demographic and economic fundamentals and ongoing structural reforms."India's near-term macro-outlook remains strong with stable growth expectations in 2025, falling inflation, and ongoing monetary easing," he the consumer trends, Chandrasekaran said premiumisation, health & wellness, and convenience are gathering pace in the FMCG industry. Quick commerce has seen exponential growth, yet physical distribution remains extremely relevant at the same time," he said adding to tap these opportunities, TCPL has adopted an omnichannel also highlighted that Gen Z and Millennials are expected to contribute to an increasing share of consumption, by some estimates, 76 per cent of the total consumption by 2030."This presents an opportunity for cooking aids, packaged food, healthier & guilt-free snacking, and mini-meal options, all of which we have added to our portfolio in the last few years. The innovation capability we have built along with our portfolio transformation initiatives over the past few years positions us well to leverage these emerging trends," he which has brands like Tata Salt, Tetly, Sampann, Soulfull, Tata Coffee, and Eight O'clock, has an "overarching ambition" to evolve into a full-fledged fast-moving consumer goods (FMCG) company, he said."With the FMCG landscape evolving rapidly, it is critical for brands to be present everywhere the consumer is. In India, we continued to make strong progress in our sales and distribution expansion, with a total reach of 4.4 million retail outlets," said company has completed the implementation of a next-gen Distributor Management System to further enhance salesforce productivity."Modern trade and E-commerce/Quickcommerce continue to be strong growth drivers, and we have started building pharmacy and HoReCa channels," he said.
India.com
27-05-2025
- Business
- India.com
Bad news for Noel Tata, this company losses widen to Rs 1350000000, still plans to open 1000…
Tata Starbucks reported a widened net loss of Rs 135.7 crore in FY25, despite a 5% increase in revenue to Rs 1,277 crore, as per the latest annual report from Tata Consumer Products Ltd (TCPL). The quick-service restaurant (QSR) chain, a 50:50 joint venture between TCPL and US-based Starbucks Corporation, had posted a net loss of Rs 82.16 crore in FY24. TCPL, which aims to have a network of 1,000 cafes by the end of FY28, is experiencing revenue growth, helped by the expansion of a number of stores. Starbucks has opened 58 net new stores and entered 19 new cities in FY25, taking the count to 479 stores across 80 cities. 'The revenue from operations stood at Rs 1,277 crore, improved by 5 per cent…driven by a higher number of stores,' TCPL, the FMCG arm of Tata Group, said adding that it has now become the largest organised cafe operator in India based on store count. The year witnessed demand softness in the overall QSR (Quick Service Restaurant) space. Consequently, the sales growth was subdued, and profitability remained muted. 'Tata Starbucks is the largest organised cafe operator in India based on store count, though the industry is significantly under-penetrated in comparison to similar per capita income GDP countries,' it said. Despite a more moderate number of store openings in the short term, the JV 'remains committed to increasing our store base in India and get to 1,000 outlets by FY28,' it added. In FY25, TCPL has invested Rs 125 crore in Tata Starbucks. Besides, it also expects growth from its vending business 'Tata MyBistro', a new entrant in the segment offering a variety of coffee, tea and other drinks mainly to institutional customers. (With Inputs From PTI)
