TCPL to double capex this fiscal, expand into new categories

Tata Consumer Products Ltd (TCPL) will double capex this fiscal with greater investments going into Vietnam where the company is setting up a new plant.

“The last year capex plan was around ₹308 crore. But FY25, the capex is going to be significantly higher; more than double of that ₹785 crore, because of a big investment we are making in Vietnam in a new plant. It's about ₹400 crore. So, there will be a big investment in capex this year,” N. Chandrasekaran, chairman, TCPL, said during the company’s 61st Annual General Meeting (AGM) held on Thursday. Tata Coffee Vietnam Co. Ltd, is a 100% subsidiary of Tata Coffee.

TCPL sells tea, coffee, water, beverages, salt, pulses, spices, ready-to-cook and ready-to-eat offerings, breakfast cereals, snacks and mini meals in India and overseas.

The plan for TCPL is to become a full-fledged FMCG company, Chandrasekaran added. 

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"There are many things on the table. But at the same time, we also have to build teams, we also have to execute. The number of things that are happening in the company, it's quite a lot, and the company is also focused on making each strategy work. So at the right time you will see further expansion into new categories,” he added. 

Over the last couple of years, TCPL has also worked towards consolidating various food and beverage interests of the Tata Group under one roof. It sells Tata tea, Tata salt and Sampann branded pulses, among several brands. 

“Today, the company is operating in multiple categories. There is beverages, salt, then we are in a number of food segments. In each one of these segments, consolidations have happened—either in terms of consolidating the portfolio or in terms of the markets in which we operate, be it the water segment, or the coffee segment, all of this is getting a lot of attention and new products are getting launched in the beverages segment…So this will continue to be our focus…So at the right time you will see further expansion into new categories,” he added.

Last fiscal it made two large acquisitions—Capital Foods (owner of Ching’s Secret packaged noodles and condiments brand) and Organic India (organic teas and health foods) that helped the company expand into new food categories. TCPL agreed to pay an enterprise value of ₹5,100 crore for 100% stake in Capital Foods while for the 100% stake in Organic India, TCPL will pay ₹1,900 crore, the company announced in January. In 2021, TCPL acquired Kottaram Agro Foods, the owner of Soulfull cereals.

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These acquisitions will “significantly” expand TCPL's portfolio, he said. 

Notably, India’s consumer market presents a long-term structural opportunity driven by a young population, a growing middle class, rapid urbanization, increasing disposable incomes, and rising aspirations, he said. 

"I believe your company is well-positioned to capitalize on this significant opportunity that the Indian consumer market presents," he said addressing shareholders virtually.

In fiscal 2024—TCPL reported consolidated revenue of ₹15,206 crores, a growth of 10%. The company reported a profit of ₹1,516 crore last fiscal.

On future acquisitions Chandrasekaran said the company "always looks” for acquisitions. 

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“We have been looking at health oriented and food products, but also other products. As long as it’s attractive, the company will continue to consider those acquisitions favorably as long as it makes financial sense and there's growth,” he said.