Vivek, I don’t have much idea about CCL. I have a bias for tata group and I also like plantation angle of Tata coffee.
Eight’O Clock seems to have turned around
Speaking about the company’s quarterly earnings, Tata Coffee’s Executive Director - Finance M Deepak Kumar said, “The primary reason for the above growth in profits was superior performance and results of the company’s US operating subsidiary, Eight O’Clock Coffee.”
During the quarter under preview, Eight O’Clock Coffee reported net profit of Rs $5.57 million as against net loss of $13.2 million in the same quarter year ago period, Kumar said.
“The performance of Eight O’Clock Coffee showed an upswing in market shares versus competition. In particular, the brand continued to strengthen its presence in the growing single serve segment,” he added.
Can anyone enlighten on following queries regarding TATA Coffee:
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They have purchased a commercial property in the month of Feb (2015) in MRC Nagar, Chennai in a bank auction. Do somebody have any information regarding the area they have acquired ?
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Why can’t they introduce their brand “Mr.Bean” (present in Kerala and Tamil Nadu) pan India and their brand “Eight o Clock” in India as they already have distribution capabilities through their parent (as they are distributing TATA tea) and the market have only two major brands Nescafe and BRU ?
Disc: Not Invested
Tea & coffee commodity prices improving?
There was another report that due to lower oil prices, cheaper tea/ coffee is in demand in gulf.
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Given recent run in Tata global beverages, does it make sense to move money from their to Tata coffee?
It seems that both Tata global and Tata coffee are moving, Is it the effect of management change or really the commodity price is going up?
Dear Sir,
We have missed a very important pointbhere. Tata coffee is in Commodity business where as TATA Global in Branded Business.
Tata Coffee will remain listed. It is a subsidiary of Tata Consumer Products.
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Concall update
BUSINESS HIGHLIGHTS
Revenue was driven by improved performance from the plantations business whereas the value
added business had a marginal decline due to pricing pressure, pandemic induced logistics issues as
well as muted demand in specific geographies.
Tata Coffee Vietnam had a turnover of ~$8-$9 million, for the quarter.
Coffee production stood at ~8,000 tonnes, tea production was at ~4.5 million kilograms and pepper
production was ~850-900 tonnes.
For Q4 FY21, plantations revenue were higher by 44% YoY to ₹97.0 crore as compared to ₹67.0 crore
in Q4 FY20, due to higher coffee sales and improved realisations on tea.
During the quarter, other income included a sale of non-core asset amounting to ~₹13.0 crore.
EBIT margin for the Eight O’ Clock brand was ~18%-20%.
In FY21, ~$5-$6 million debt was reduced by both Tata Coffee Vietnam and Eight O’Clock Coffee (EOC)
Tata Coffee Vietnam witnessed a positive profit after tax and started re-payment of the loans which
showed signs of healthy cash flows during the quarter.
Instant coffee had a healthy order book in India and Vietnam and its production was operating at
almost full capacity.
UPDATES
The management expects coffee production to be stable and pepper production to be higher than
FY21.
The company is witnessing pricing pressure on arabica and robusta due to challenges faced
worldwide.
In the short-term, Instant coffee business witnessed volume and pricing pressure due to lower
demand from Out-of-Home channels which were impacted due to lower consumption on account of
Covid.
India’s Instant coffee exports for the quarter have been higher despite logistics issues and fresh wave
of lockdowns in Europe.
The company launched its coffee brand, ‘Sonnets‘, which has single origin specialty arabica beans, on
its e-commerce portal
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With Global prices inching up, It could be a great positional play. Anyone here any idea of sensitivity of pricing to PAT.
must read points from concall!
Q4FY23 - concall highlights
• The standalone quarterly performance revenue operations were up 13% YoY to Rs257 which is primarily higher due to the higher revenues from Instant Coffee and the plantation operations, largely driven by product mix and higher price realization.
• PAT was up by 16.33% YoY due to implementation of our twin marketing strategies that is differentiation and disintermediation have largely supported these performances.
• Company recorded green coffee sales and excellent Instant Coffee sale performance from all three plants.
• On the consolidated results, the revenue from operations stood at Rs723 crores, up by 10% YoY due to higher realizations across all businesses and primarily around by the product mixing and largely driven by our Instant Coffee performance from all out factories.
• The operating performance of brand - Eight O’clock was impacted by low volumes, higher coffee prices and slightly higher input costs.
• Arabica prices have softened due to increased availability. On the other hand, Robusta prices have remained firm and if not a little bullish on account of reduced availability globally and especially from India.
• The company had one-time profit on sale in the Q2FY23, which was supported and which is also adding the overall numbers.
• Vietnam capacity at peak utilisation and order book remains healthy for further quarters as well.
• Instant coffee industry is expected to grow by 3% and company being present in 3 verticals i.e spray, agglo and freeze. Freeze is having a strong demand. In terms of geographies, Africa was witnessing some slowness due to inflation and higher coffee cost.4-5% YoY higher volume growth in FY23
• Robust prices are at $2400/tonne – 11 year high due to shortage of crops.
• For Eight O’Clock , company is focusing on a lot of innovation and kind of new product developments.
• On capex front, company is doing it on the Starbucks Roastery in Kushalnagar, which will come into stream next couple of months. And also, capacity debottlenecking in the instant coffee plants.
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