New Delhi: Tata Consumer Products Ltd. will continue to explore the right acquisition opportunities across various categories to fuel its growth, the company’s Chairman N Chandrasekaran Said on Monday. Responding to shareholders’ questions at the company’s annual general meeting, Chandrasekaran, who is also the chairman of Tata Sons – the holding firm of the Tata Group – said that TCPL (Tata Consumer Products Ltd.) will focus on leveraging its product portfolio. Expanding distribution and product innovation and entering new categories, supporting both organic and inorganic growth opportunities in the future.
“We also believe in inorganic expansion and yes inorganic expansion is one of the key strategies for the company. The cash in the company will certainly be used for the right inorganic growth opportunities,” he said.
Responding to another question whether there is going to be an acquisition in the water segment, Chandrasekaran said, “Yes, we will continue to explore opportunities for any expansion, both on the water side and on both the food and beverage side and the whole. In kind of new categories, which can also come through acquisitions.”
Last year, TCPL acquired Tata Smartfoods Ltd. (TSFL) for a cash consideration of Rs 395 crore from its group firm Tata Industries. In addition, to expand its product portfolio, it had acquired Soulful business from Bengaluru-based Kottaram Agro Foods engaged in the business of healthy breakfast cereals and millet-based snacks.
When asked about the company’s capital expenditure plan for the current fiscal, he replied: “Last year our capital expenditure was Rs 250 crore and for FY23 it is going to be Rs 361 crore, out of which project work It will be around Rs 161 crore.”
Stating that the company is on a growth trajectory, he said, “It is better for the company to focus on leveraging the product portfolio and expand distribution and continue to innovate the product portfolio and enter new categories. We are organic. Both inorganic and inorganic will support growth opportunities.”
Elaborating on TCPL’s strategy, he said, “The company is focused on expanding distribution, expanding product portfolio and timing and bringing in new categories and a lot of focus in the domestic market.”
On the international market, he said the focus would be on the US, Canada and the UK and “rationalised our presence in all other markets”.
“The company has a lot of opportunities to increase the return ratio or margin and will continue to improve to achieve higher growth,” he added.
“The business is already EBIDTA positive this year, and we have a very promising outlook on the business, so we will continue to expand strongly.”
TCPL has an “extremely aspirational growth plan” and in the last two to three years, it has been consolidating the portfolio of the company, the company as well as the entire group, and has launched products in both the beverage and food sectors.
About Tata Starbuck, the TCPL joint venture, Chandrasekaran said, “This year the business is already EBITDA positive and we have a promising outlook on the business and continue to expand strongly.”
Formed in 2012, Tata Starbucks It is a 50:50 joint venture between Starbucks Corporation and TCPL.
The company is increasing its R&D budget to Rs 30 crore in FY23 from Rs 24 crore last fiscal, Chandrasekaran said, adding that “there will be a substantial increase in R&D budget going into the future”.
Responding to a query on TCPL revenue through Tata Group e-commerce arms BigBasket and Tata New, he said the products of the FMCG arm of Tata Group are currently sold online through BigBasket channel and account for about 2 per cent of total sales. contribution is received.
“We certainly want to see significant growth in this going forward,” Chandrasekaran said.
On the expansion of the product portfolio, the Chairman, TCPL said that it has launched several new products last year and will continue to expand. These new products contributed about 3 percent of the company’s revenue.
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