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Operating environment highly volatile amid geopolitical tensions, supply chain challenges: N Chandrasekaran

The demand-supply mismatches in crude and several other commodities are driving inflation, which will likely impact demand across categories in this uncertain environment, said Tata Sons Chairman N Chandrasekaran while addressing shareholders at Tata Consumer Products’ 59th Annual General Meeting.

June 27, 2022 / 01:50 PM IST
TCS Chairman Natarajan Chandrasekaran

TCS Chairman Natarajan Chandrasekaran


A challenging operating environment amid geopolitical tensions, supply chain challenges and resultant inflation are likely to impact demand across categories, Tata Sons Chairman N Chandrasekaran indicated while addressing shareholders at Tata Consumer Products’ (TCPL) 59th Annual General Meeting.

“Geopolitical tensions, supply chain challenges, and demand-supply mismatches in crude and several other commodities are driving persistent inflation, which will likely impact demand across categories,” he said.

According to the chairman, the company will, however, continue to focus on strong execution, maintaining agility and nimbleness to adapt and navigate through short-term bumps and take advantage of opportunities that could arise during this period,” he said.

Chandrasekaran also highlighted the milestones achieved by TCPL during the year gone by even as the company faced uncertainties on several fronts.

“During the year, we made substantial progress on all the six strategic priorities that we had identified for the company. Significant progress has been made on expanding our distribution, accelerating the pace of innovation, redesigning our supply network, and driving digital transformation across the value chain,” he said.

TCPL’s India business grew 13 percent in FY22 and the company recorded market share gains in the core categories of tea and salt. The company said it now reaches over 201 million households in India and has expanded its distribution 2.6 million outlets. During the year, TCPL expanded into the ready-to-eat category with the acquisition of Tata SmartFoodz, while NourishCo, Tata Sampann, Tata Soulfull, and Tata Q, collectively grew 52 percent during the year.

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“We are investing in these businesses to fuel them further. Despite the challenges posed by the pandemic, we opened 50 new Tata Starbucks stores last year, taking the total to 268 across 26 cities,” shared Chandrasekaran.

TCPL’s international business also witnessed double-digit growth last year, as per the company’s annual report.

“Our coffee business in the US is seeing stable market share and we are following a three-brand strategy in tea for international markets with Tetley, Good Earth, and Teapigs. We will continue to drive further efficiencies there and strengthen our portfolio in fruit and herbal and specialty teas to find new sources of growth,” he said.

In a major move, TCPL in FY22 also announced a reorganisation plan to combine Tata Coffee’s business into Tata Consumer Products. According to the chairman, this exercise will bring similar businesses in the two companies together, create dedicated verticals to drive focus, and result in revenue synergies and operational efficiencies.

Overall, TCPL’s consolidated revenue for the year at Rs 12,425 crore, up by 9 percent, on a like-to-like basis, while consolidated EBITDA for the year at Rs 1,749 crore, up by 11 percent. The company registered a net profit of Rs 1,079 crore in FY22, up by 9 percent.
Devika Singh
first published: Jun 27, 2022 01:23 pm
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