TATA CONSUMER PRODUCTS LIMITED CC-Dec23.pdf · 2024-02-08
Sunil, my first question was again on EBITDA margins. I heard yo u say that 15% is now the bottom with respect to the margins. And I also understand this is coming from the commodity deflation which we are seeing. But is there something more which is driving this confidence on EBITDA margins, especially coming from the growth businesses? Sunil D’Souza: So Sheela, number one is, I wo uld say, the confidence stems from 3 or 4 different pieces, right? The gross margins of tea and salt are broadly now where they should be. And this is, when I say they should be, given the historical numbers that we have. Number two is the growth businesses are on a very strong trajectory. But overall, as we are adding businesses, we are not adding costs on the bottom line. So the whole advantage of scale and operating leverage is what is help ing us derive efficiency on the bottom line. And again, when you look at benchmark companies around, there is no reason we should not be getting to -- like I said, 15% is a base. I mean even with this, we are still not in the middle of the pack when it comes to EBITDA margin. So overall, given top line growth, given gross margin efficiencies, given our cost focus on the middle of the P&L, I don't think there is a reason. Just one rider, I would say. While I say 15% is a base. There will be some ups and dow ns. But we would say directionally, 15% would be the base, and we will grow beyond this.
Understood. And my second and final question is we talk about e-commerce share for us being at about 11%. But if you -- just trying to understand what th e share of e -commerce would be for the growth businesses right now? Sunil D’Souza: Okay. So Sheela, we have not actually dissected the share of the Growth. But broadly, for Sampann, I think I would have a higher share on e -commerce versus offline from the simple fact that I said, I mean, we compete with the kirana stores themselves in many categories, that's number one. For Soulfull again, we would ha ve probably higher than what we have as overall e -comm share because, again, availability and drive continu es to be an opportunity for us. NourishCo, I mean I think our offline share would be higher. But overall, I think 10.7% e -comm, I woul d think we would be in the top quartile of FMCG companies in the country. And just to highlight, when we have started our journey, we had said we will build very strong muscles in modern trade and e -commerce. And functionally, we had said we will build RTD and digital. And you can see that all that translating down into the business.