Apart from its Tata Sampan range of products , Tata Salt,TataTea and Himalaya brand mineral water, Tata consumer owns Starbucks in india which has 191 outlets in 12 cities and at major Airports…and Starbucks contribution in Q1 was Zero with Covid19 lock down. However , by August 60 outlets had already opened as per MD , TCPL as per an article link given below. I hope by now almost all must have been opened.
Starbucks have also tied up with Swiggy to door deliver all Starbuck eatables.
Let us look at what all Star bucks sells :
Apart from the usual products offered internationally, Starbucks in India has some Indian-style product offerings such as Tandoori Paneer Roll, Chocolate Rossomalai Mousse, Malai Chom Chom Tiramisu, Elaichi Mewa Croissant, Chicken Kathi Roll and Murg Tikka Panini to suit Indian customers. All espressos sold in Indian outlets are made from Indian roasted coffees supplied by [Tata Coffee] Starbucks also sells Himalayan bottled mineral water. Tata Starbucks introduced Starbucks’ tea brand offering 18 different varieties of tea across its outlets in India. One of the varieties, called the India Spice Majesty Blend, was specifically developed for the Indian market and is only available in India. India Spice Majesty Blend is a blend of full leaf-Assam tea infused with whole cinnamon, cardamom, cloves, pepper, star anise.
On 15 June 2015, Tata Starbucks announced that it was suspending the use of ingredients that had not been approved by the [Food Safety and Standards Authority of India]. The company did not specify what the ingredients were or which products they were used. The company also stated that it was in the process of applying for FSSAI approval for these ingredients.
Tata Starbucks launched the Starbucks Delivers program in early 2019. The service offers home delivery from Starbucks outlets through a partnership with [Swiggy].The service was first launched in Mumbai, being rolled out to other cities.
Foods segment revenues ( without including the GSK element ie Horlicks, Boost ) - grew by 19 pc - very impressive. This despite the slowdown in out of home consumption leading to sharp fall in Ice Cream sales
Domestic revenue growth ( without GSK ) up 3 pc vs ( - ) 7 pc in Q1 - again, impressive
Management - indicated launch of exciting products / innovations under the Horlicks / Boost brands. Here…I would say that I am really hopeful. GSK was doing a lousy job when it came to Brand extension into adjacencies - like failed attempts at Horlicks gulucose biscuits etc. I really think that Horlicks and Boost do command a lot of brand equity and HUL can drive home the advantage. FINGERS CROSSED !!!
Beauty and Personal care - reported flat revenues, when the discretionary brands ( like cosmetics, deos etc ) have de-grown by 25 pc
Double digit growth in - oral care, skin clensing, hair care
Domestic volume growth at 11 pc…thats great …considering the operationg environment
Revenues up - 9 pc
Intl revenues up - 7 pc in constant currency terms
EBITDA margings at 19.6 pc. Company has guided to maintain them above 19 pc over medium term - thats healthy !!!
PAT growth at 15 pc - on a like to like basis ( due exceptional items, reported PAT growth is lower )
Parachute rigids - volume growth @ 10 pc
VAHO - volume growth @ 4 pc
Saffola cooking oils - volume growth @ 20 pc
Saffola Oats - volume growth @ 45 pc
Saffola Honey - scaling up well
Livon - volume growth @ 1 pc
All this despite a steep fall in CSD volumes
Adverstising and promotions @ 9.5 pc of sales - back to pre-covid levels
New launches - Saffola Aarogyam Chavan Amrut, Saffola Kadha Mix, Golden turmeric Milk Mix
Bangladesh business ( 50 pc of Intl sales ) - up 16 pc in constant currency terms. Non coconut oils portfolio up 31 pc !!! This portfolio now constitutes 35 pc of sales vs 25 pc two yrs back
South East Asia ( 26 pc of Intl business ) - de grew 4 pc
North Africa ( 12 pc of Intl business ) - degrew 6 pc
South Africa ( 7 pc of Intl business ) - grew by 16 pc
Would love to know your thoughts on jyothy labs. I like and use their existing products (henko matic, exo) but not very convinced about their new launches. Since you’ve owned it in the past, what are your views about the management.
I like the mangement. They have been doing a descent job over the past 4-5 yrs. The way they integrated the Henkel portfolio and turned it around was commendable.
The only concern ( in long term ) with JLL is their brands like Exo, Henko, Maxo are perfect armtwisting candidates by large organised chains like - Reliance retail, Amazon etc who generally stock up the Mkt leaders in each category and also push their own private labels. Therefore the scope for emergent brands is kind of shrinking.
One positive - COVID has been a positive for them as they are relatively strong in rural and wholesale channels vs the modern retail which has been suffering. Also, the CSD channel has been doing well for JLL.
Consolidated EBITDA up 26 pc to 402 cr despite inflation in Tea prices
India packed beverage sales up 29 pc led by volume growth ( 11 pc ) and pricing…@ 1120 cr
India foods revenues up 13 pc ( vol gr at 6 pc ) @ 580 cr
Sequential improvement in Nourish Co’s performance
Branded Intl beverage sales up 11 pc ( constant currency growth - lesser due unwinding of pantry loading )
Starbucks JV - sales at 71 pc of pre COVID levels now ( ie in Sep vs 27 pc of pre covid in Jun, 54 pc in Aug ) . Store count at 192 in 12 cities. New store opening - 11, added store in Lucknow
Tata Coffee ( 58 pc subsidiary ) - sales up 17 pc, volume growth at 11 pc
PAT at 273 cr up 31 pc, adversely affected by 24 cr exceptional costs related to business integration and impairment loss ( non cash ) on assets related to Australia business
Although would be good to have this rerating but not sure if there will be anything major over medium term yet. FMCG sales growth of 20% is somewhat comparable to peers, PBT is indeed good but still profit from FMCG is miniscule in the scheme of things…Would be interesting to see how market behaves…
Highest and best numbers in the company’s history. A validation for company’s differentiated business model ( greater backward integration and manufacturing excellence ).
Today Granules is a 22 product company, up from 5 products a few years ago. Company believes in having fewer number of products but achieve excellecnce and cost competitiveness in them, through backward integration into APIs. ( this is what I like the most about the company ).
Company guiding for PAT growth for FY 21 at 80 pc . Next yr onwards, they are guiding for a PAT growth of 25-30 pc with FY 21 as base year.
MUPS technology ( used for extended release tablets ) based ANDA with in house APIs - next growth driver, approvals and launches expected in Q3 and Q4.
Q2 sales - 858 cr vs 700 cr YoY, Gross Margins at 58 pc vs 49 pc YoY due greater share of FDFs, EBITDA margins at 30 pc vs 20 pc, PAT at 164 cr vs 96 cr YoY. Company confident of maintaining atleast 27 pc EBITDA margins going fwd with an aim to keep clocking 30 pc.
Covid related expenses - 9.9 cr in Q2. Total in FY 21 - 19.3 cr.
Company is encouraging a few speciality chemical manufacturers to manufacure some key KSMs like - Para Amino Phenol ( for PCM ) and others with assured contracts ( to reduce China dependence ). Since, these are Spl Chems and not APIs ( plus capital intensive ), company does not intend to make them in house.
Contribution from core molecules at 70 pc, to go down to 50 pc over medium term. Core molecules - Ibuprofen , Metformin, Paracetamol, Methocarbomol, Guaifenesin. New molecules where the company is ramping up include - Losartan, Cetrizine, Fexofenadine. CAPEX for this yr likely around 400 cr. ( around 80 cr for APIs , rest for MUPS block and FDFs ). Better estimate for further CAPEX by next yr. CAPEX not going to stop. However the company is concious of its ROCE profile and would maintain it above a particular threshold desipte the Capex.
Current revenues from Europe ( FY 20 ) at 500 cr. Expected to go upto 1400-1500 cr by FY 23. Europe expected to be a major growth driver going fwd. Company agressively working towards reducing dependence on US and increasing the contibution form ROW, LATAM and Europe. US revenue share likely to be around 40-45 pc by FY 23 ( present share at 53 pc ).
Its just that growth rates in Electrical Kitchen appliance like - juicers, mixers, grinders, food processors, toasters, blenders, sandwich makers, pop up toasters etc is higher than metallic appliances like cookers, tawas, pans etc. Thats one.
Secondly, the electrical appliances have shorter lives, typically 3-5 yrs vs double digit life years for the latter group. So…thats a natural source of repeat demand.
Now TTK has a signifigant presence in both the groups while Hawkins only plays in the metallic appliance mkt.
Here I would like to step in and endorse post Corona just like their urban counter parts rural and semi urban population would also become hygiene conscious.
