Ladies and gentlemen, good day and welcome to the Tata Consumer Products Limited results conference call hosted by ICICI Securities Limited. As a reminder, all participant lines will be in the listen only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star, then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Aniruddha Joshi from ICICI Securities Limited. Thank you and over to you, sir. Thanks, Farzan. On behalf of ICICI Securities, we welcome you all to Q4 FY22 and FY22 results conference call of Tata Consumer Products Limited. Now, I hand over the call to Ms. Nidhi Verma, Head of Investor Relations and Corporate Communications. Thanks, and over to you, Nidhi. Thanks. Thanks, Aniruddha, and welcome everyone. I hope you had the time to go through our results that we announced last evening. For today's call, I'm joined by Sunil D'Souza, Managing Director and CEO, L. Krishnakumar, Executive Director and Group CFO, and Ajit Krishnakumar, COO. What we will do is we will spend about 15 minutes or so walking you through some of the key highlights of the quarter and the year, and then we will spend about 45 minutes to answer your questions. Without further ado, over to you, Sunil. Thanks, Nidhi. I'll go straight to slide number six, which is the executive summary. During the quarter, our consolidated revenue grew 6% like-for-like. Full year therefore came in at a 9%, net of all the exits that we've done. On a two-year stacked basis, which translates to a 15% revenue growth, like-for-like business. EBITDA for the quarter was up 35%, bringing the full year to 11%. On a two-year stacked basis, it is up by 16%. The India business for the year grew by 13%, with 3% volume and 10% revenue for India beverages, 8% volume, 19% revenue for India foods. International grew by 1%, cycling an elevated base, where the last year we had grown by 1%. Now, the critical thing is with de-inflation tapering off, India beverage margins saw significant improvement. Just as a perspective, margins moved by close to 1,500 basis points for the quarter-on-quarter versus same quarter of last year. Now, we invested a significant amount of that into the new businesses and still expanded the consolidated EBITDA, which was up by nearly 400 basis points. Despite significant inflation in the foods business and despite a 29% increase in A&P for the India business. With that said, I will just urge you, and I'll walk you through the details later, but India foods business is two parts. One is salt and one is all the growth businesses. On the salt, we maintained margins and with driven the growth in the new businesses. Overall, our growth businesses are up by 52% for the year. We had strong free cash flow conversion. FCF to EBITDA came in at 100%. Market share was up. India beverages up by 100 basis points. India foods up by 400. We continued to make progress against our strategic priorities. We acquired Tata SmartFoodz, strengthened our S&D infrastructure, tripled our innovation from where we started two to three years back, invested in new drivers of growth and of late with the Tata Coffee and international restructuring, a new global simplification plan to drive efficiencies and significant synergies. Next slide. Next. We go to slide eight. If I talk about Q4 2022, India beverages 3% volume, negative 1% revenue as prices began to normalize. India foods, like I said, there are two parts of this story. Salt is steady margin. Little bit of pressure, but overall for the year we grew 8%, but for the quarter it was a bit soft as we took pricing. Sampann has continued to grow and revenue up by 19%. US coffee volume up 3%. International tea volume up 5%. Overall, INR 3,175 crores of revenue. Next page. For the full year, beverages volume up by 3%, revenue up 10%. India foods volume up 8%, revenue up 19%. US coffee negative on volume because in the early part of the year, international overall we were cycling the pantry loading of COVID. Same thing you see in international tea, negative 3%, but now the volumes are starting to come back. Tata Coffee, including Vietnam, full year 3% volume, 9% revenue, and overall INR 12,425 crores of revenue. In terms of Q4, revenue growth of 6% like to like. EBITDA growth is 45%. PBT up 54%. Group net profit 222%. Before exceptionals, 89%. Now we're sitting with INR 2,486 crores of cash, which incidentally despite the investment in Tata SmartFoodz, the recapitalization of ACPL, investment into taking control of the Drinks JV and Starbucks investments is still higher than where we were last year. Next slide. On a full year basis, revenue up 7% at INR 12,425 crores. EBITDA up 11%. PBT up 12%. You will see a perfect flow through from revenue down to PBT. Group net profit up by 9%, and before exceptionals up by 12%. EPS up by 9% year-on-year. If I talk of the strategic priorities, the six pillars that we have strengthen accelerating core, driving digital and innovation, unlocking costs and synergies, creating a future ready organization, new opportunities, and embedding sustainability. We've made progress against all of them. We had made a commitment of 1.3 million outlets by March. We are there. Going forward by next year, we are saying 1.5 because now the focus is on rest of our country rural and therefore wholesale. While we are powering up brand, expect a 2.5+ multiplier to get us to our 4 million outlets, which we have committed by September of 2023. We've continued to raise numeric reach. If you take the average for a year, beverages up by 18, salt by 15. We are completely digitized in our chain. Apart from appointing distributors, now we are focused on rural and semi-urban because that is where the numeric opportunity for us lies. Next slide. Great progress in alternate channels. Modern trade is now up 30% year-on-year crossing INR 1,000 crore. In e-commerce, we are the market leader. The good news is, despite COVID waning and consumers going back to their old styles of shopping, we are still 7.3% e-commerce as a percentage of sales. Next slide. We upped A&P. We spent 22% higher this year on A&P in our India business versus last year. Focus on the premium brands of Tata Tea Premium, focus on the South with Chakra, as well as coffee, which has paid dividends, with coffee growing 44%. Tea overall, 100 basis points share increase. Next slide. In foods and salt, market share is up by 400 basis points. Focus on premium salt, which has given us results, and you'll see later we grew by 26% there. Tata Soulfull, once we've focused on the no Maida Choco and affordable packs is off to a fantastic start. We have launched Soulfull salt, Tata Salt, in the South to gain market share out there. In our stronghold in North and the East, we are seeing some lookalikes pop up. Also, we are going on a consumer education to show them that every salt is not Tata Salt. Next slide. Premiumization starting to show results. Sampann up by 28%. Value-added salt up 26. Tata Coffee up by 45%. Our new launches expand our premium brands like Tata Tea Gold Care is now 4.5% of Tata Tea Gold. Next slide. I won't dwell on this slide, but overall, a two-year CAGR of 19% in the beverages, 18% in food, international up by 6%. Significant improvement over the last two years. Next slide. Innovation continues to be on a roll. We started off with 0.9% as a percentage of sales. We've exited the year at 2.7%, which is significant improvement. A lot of work in the last two years on creating an agile and efficient supply chain. We have roughly 11,000 drop-off points serviced through 38 centers across India. Integration has yielded great results. We've got more than a 25% reduction in secondary freight because of integrating all our businesses and logistics. Completely digitized back end as well as supply chain. Focus on sustainability with 24% of our energy for the supply chain coming out of renewables. We have a rinse and repeat model now with integration, and we've integrated Soulfull as well as Tata SmartFoodz within three months of transaction close. Next slide. We've announced our plan for Tata Coffee merger as well as simplification of the international business. Next slide. Which will yield us operational efficiencies for management, legal and administrative costs, faster decision-making and execution, taking out the minorities and creating a single listed entity, capturing the full value of the group. Creating focused business verticals for extraction and a dedicated plantation vertical, and unlocking significant potential synergies going forward. Next slide. We are en route to becoming a large FMCG company, so our new engines of growth are firing. NourishCo, Sampann, Tata Soulfull, and Tata Q have shown a 52% revenue growth for FY 2022. Next slide. Inorganic acquisitions making progress. 100-day integration, rebranding of Soulfull to Tata Soulfull. Collaborating with the outside world with IIMR for developing new products. As I said, the INR 10 no Maida Choco is off to what I would term as a rocket start. NourishCo, we've broken even on Himalayan for the first time ever since we acquired the brand. Great progress once we've rebranded Tata Water+ to Tata Copper+. Growing more than three times in FY 2022. Distribution is up by 80%, which should yield us results now when we see the first summer, full summer for NourishCo under TCPL. Expanded geography, which again will bear results starting this year. We've expanded capacity already for growth. Lines up by 50%. Driving innovation, which is up to 10% of sales. Focus on sustainability, whether it is with planet-friendly products in the U.S. Tata Coffee winning awards in health and safety. Tata Tea focusing on social awareness for water and driving sustainability at Starbucks. Next slide. Just a quick snapshot on the different businesses. If I just go to slide number 31. India business 3%. The India beverages 3% volume, 6% revenue, 100 basis points market share gain. The big news here is EBIT margin is up by 400 basis points year on year in FY 2022. For the quarter alone, gross margin was up by 1,500 basis points. Next slide. Sorry, just a point. India revenue grew by 6%, lapping a 32%, growth in FY 2021. Just for perspective, for Q4, we were lapping almost a 55%-60% growth, and we still delivered a decent performance. Next slide. India Foods, 8% volume, 19% revenue, more importantly, a 400 basis points market share gain. We are now touching the 38% share for total salt. EBIT margin did decline, but here again, I would emphasize there is two parts of this business. One is salt, where we are maintaining margins, and the second piece is our growth businesses where we're investing for growth. Next slide. NourishCo, 86% revenue, touching INR 350 crores in revenue. Significant growth, and more importantly, I think we're well geared for driving growth for this year. Next slide. Tata Coffee. Plantations revenue growth was soft, -3%. Revenue growth was 11%. There could be a point where everyone says, "Why was their volume growth low this quarter?" Just in perspective, Tata Coffee, we've been seeing significant shipping issues and therefore you would have seen a bump in Q3 as we made sure that we did not hold any inventory in any of the plants and shipped out volume as and when it happened. Despite that, FY 2022 Q2 overall, a 19% revenue growth. Next slide. Tata Starbucks, this is probably the second most normalized quarter that we've seen despite the pickup of Omicron in the beginning of the quarter. Now we are in 26 cities, 268 stores. 96% of our stores are reopened. The only ones which are not are the ones either in office complexes or in IT parks. Good news is 18% same store sales growth versus pre-COVID period. We are seeing great traction and remain very confident about this business going forward. We did open 23 stores for Starbucks in a single quarter, which was a record bringing the whole year to 50 stores. That just provides a base of what the team can execute. International businesses, UK, we maintained, more or less maintained our share in Everyday Black at 19+. Teapigs, which is a focus for growth, up by 7% for FY 2022. While overall revenue growth, as I mentioned, while cycling high of COVID was down by -2%. The US coffee business share of 4.3%. Flat tea and coffee growth despite significant pricing. Taking significant pricing. There was a fine balance between margin, volume, and revenue out here. Tea growth -8%, again cycling COVID of last year. Canada maintaining market share at 27%-28%. Specialty has dipped significantly and therefore -9%. They also cycled a high COVID peak and -7% revenue growth. Financial performance. LK, very quickly. Great. Thanks. Thanks, Kunal, and good morning, everyone. On the standalone basis, we grew revenue for the quarter by 5%, and this is driven both by volume growth in the tea business as well as some pricing in the coffee. In terms of EBITDA, we saw 102% growth, largely a function of recovery of tea margins to a normalized level, coupled with some investment behind growth initiatives. Moving on to the consolidated performance, the increase was 5%, 6% on a constant basis, driven by a similar rate of growth in all businesses. In terms of margin, the growth was higher at 45%, driven largely by the improvement in margins in the India business. In the international business also we saw slightly improved margins, because of a strong performance in the last quarter by the coffee business and better lower weight of A&P and other expenses. Non-branded business, slightly lower margins impacted by lower realization in the tea blending. On a standalone basis, the financials for the quarter, the standalone reflect basically the India beverages, India foods and a little bit of exports into the overseas markets. We've seen a growth rate of 5% and improved margins. Improved margins function of two things. We talked about improving operating margins in tea, but also as you look at the charts, you will see there's a high investment behind brands. This growth in margins is notwithstanding a significant increase in the A&P spend. PAT higher at 152%, reflecting largely the improved operating performance but also a lower weight of exceptional items. For the full year, we grew 11% with a PAT growth of 43%. On the consolidated basis, we saw revenues up by 5% for the quarter. A strong margin improvement of 4% driven by the India business as well as improving margins in the international business. Exceptional items were lower. PAT at INR 289 versus INR 133 crores. Group net profit 239 versus 74 growth. I just want to make one comment on the share of profit on JV and associates. You will see that the number is flat for the full year, but slightly lower for the quarter. It reflects there are two significant parts to this. One is the Tata Starbucks business and the second is the plantation businesses that we have. Tata Starbucks had an improved performance relative to the previous year, but the plantation businesses were impacted by lower crop and lower tea prices. This is an impact of both. The other point I want to call out, because some analysts have still been asking questions, that when we have the plantation interest in North India, we need to remember that North India plantations don't have crop for most of last quarter. The loss in plantations tends to be higher in the last quarter. That's a phenomenon some analysts have not fully come to grips with. I thought I'll make a mention of it. Moving on to segmental results, we have changed the segmental presentation to talk of. We have presented on a like-to-like basis here. We have changed the presentation to India and international business. The reason being, we've alluded to it in the last analyst call, that we are managing the India business on an integrated basis, and we often allocate capital between businesses and subgroups of businesses. Equally important is that the organization structure is a single structure with a common sales, supply and other functions. It's only natural that we combine the businesses. We will continue to give revenue and appropriate margin guidance going forward. If you look at the profile, 69% of the revenue is coming from the India business and 31% from international businesses. More or less a similar profile in terms of the segment results, with the international business improving profitability over the last two quarters and two years. We are happy with the performance overall on the margin improvements in the international business. India business, the margins are a reflection of improved performance in the tea business, but also higher investment behind some of the growth initiatives, which over the medium term will also deliver improved margins. Overall, as a company, our guidance still continues to be improving margins in the medium term. Just to give you a summary of to conclude and what we're seeing going forward. The good news is the recovery following the third wave has been steadfast, but the geopolitical situation is evolving and exacerbating inflationary pressure. The good news for us is the three big commodities for us, coffee, tea and salt, we've seen the hikes in the past, and hopefully they are range-bound right now. We are not too exposed to the new emerging inflation because of the geopolitical situation in wheat, oil, palm oil and sunflower oil, for example. That said, overall inflation and its impact on consumer behavior is going to be a key monitorable. In the international space, again, we've been taking rapid price increases in line with the inflation that we're seeing. In-home consumption is also tapering off as well as the impact of broad-based inflation needs to be monitored, and we need to be agile in moving pricing around. In terms of business, we think we've delivered competitive growth in our core businesses. We've gained 100% tea, 400% salt, and we aim to continue that going forward. India packaged beverages have seen a return to normalized margins. In terms of growth, we are cautiously optimistic given the macro environment. Just as a perspective for January and March, Nescafé does report close to a 5% volume growth coming back in India, which is good news, and we continue to focus on aggregation to drive growth. For the year, the foods business has seen good volume growth, both salt and sundries. For this coming quarter, we are lapping a high quarter, and therefore we need to be mindful about that. The cost pressures, however, will continue for a while, and we've got to be agile moving around. In out-of-home businesses, both Starbucks and Nestlé have delivered a fantastic performance despite the two waves of the pandemic. Given that we are seeing this pandemic slowly receding, hopefully, therefore, we expect continued momentum in our businesses if there are no new surprises. Our new businesses of Soulfull, TSFL are on track, and we expect to drive growth. TSFL, we could expect to see significant momentum end of Q2, early Q3 as the exports to India ramps up. In the international business, the focus will be on executing against plans, especially three brand strategy and gaining share in food and herbal and specialty. Like I said, we will be taking pricing actions as appropriate. Given the inflation and investment required for some of the new businesses, we will continue to optimize margins at the consolidated level, balancing margin, market share and volume momentum. With that, I hand you back to Nidhi. Thank you. Thank you, Sunil. Moderator, we can go back to the Q&A queue now to take some questions. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to withdraw yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Participants connected on webcast, please type your question in the text box and click submit. Your question shall be addressed by the management members. Reminder to the participants, anyone who wishes to ask a question may press star and one. Participants connected on webcast, please type your question in the text box and click submit. Your question shall be addressed by the management members. Thank you. First question is from the line of Abneesh Roy from Edelweiss. Please go ahead. Yeah, thanks. My first question is on e-commerce market share and fee. Almost 31.9% market share, which is almost double of your national market share. My questions here are, which e-commerce platform this data is based on, and which is the agency which is doing it? Is it possible to replicate this kind of a success in your other categories? Is BigBasket acquisition by the group also already helping in a significant manner here? What really brings this kind of a gain in market share? I just checked on the pricing bit. I did see that your pricing is a bit lower than the other large players. Apart from pricing and, say, buying the banners and marketing, what else really bring the market share? Abneesh, let me respond to you on the pricing question. I think you will see pricing go up and down in the e-commerce space in line with I think right now everyone has got a summer sale going, for example, so I think we are running a program around that. You will see pluses and minuses happening all the time. Number one. Number two is the high market share in e-commerce only points to the strength of the brands that we have, and assuming that this brand is available at all places, the kind of market share that we could hope to have in the general market. That just points out to the more important thing is that distribution and brands are. I would read it that way. Number three, it is the overall market share. I think it covers Amazon and a few other platforms, and it is not only limited to BigBasket. This is not one pack thing. If I'm not mistaken, again, I will qualify that. If I'm not mistaken, and Nidhi will confirm this with you, it is syndicated data coming out from the e-commerce. Again, just to highlight, this just shows the strength of our brand and the ability to gain market share if we are evenly distributed. That is the big focus. Even if I take an offline number, Abneesh, I am about 10% behind on numeric versus my biggest competitor and 10% behind on market share. Just by integrating distribution, I could get too close to leadership, and that is, that will continue to remain the focus. Yeah. One follow-up on tea business. This is more in terms of raw material for FY 2023. What is your take? Even Russia is a large importer that seems to be a bit difficult. But on the other hand, Sri Lanka, which is a large exporter, is also not able to export. Are these two canceling each other, so you don't see a big inflation for India tea raw material, FY 2023? I'll just give you a slight bit of color on that one. In FY 2021, the tea price had spiked up because of the lockdowns and therefore the inability to harvest, especially the first and second flushes. FY 2022, we thought it would normalize, but then there were droughts in Assam in the months of May and November, and therefore the shortage on crops, and that kept the prices high. But that said, the pricing came down significantly from where it was in the same period a year ago. Right now it is operating broadly range bound. That is number one. It all depends, I mean, it broadly depends on the rainfall and the crop output going forward. Right now, if you believe IMD being, I mean, a good forecaster of 98%-99% of long-term rainfall, we should see a decent monsoon and therefore a decent crop, and therefore pricing should be range bound, if not with a slight downward bias. That's number one. Number two is to answer your question on Russia and Sri Lanka. Both the places remember it is an Orthodox market and a slightly higher quality Orthodox. India is more of a CTC market and less on Orthodox. So while this imbalance on demand and supply could cause some of the customers to shift to Orthodox from CTC, but capacity is limited and the fact that we expect a slightly better crop this year than last year should broadly hold, if not with a slight downward bias on tea pricing. Sure. My last question is on Himalayan and Tata Q. The Himalayan breakeven for the first time, is it sustainable and what led to it? Then Tata Q, you have the number two brand in this category. Wanted to understand who is number one and how big is the total addressable market for Tata Q. Himalayan, Abneesh, just similar to all the brands that we have, I think we've got fantastic brands, but they've still simply not been available to consumers. As we are expanding distribution, just FYI, I think September of 2020 is when we detached the Himalayan distribution from Varun Beverages and went on our own, and that is when we started to see the traction, and this is led by distribution. It is not led by pricing, it is not led by any other extraordinary effort. Yes, extraordinary effort in terms of distribution, more accessibility and more optics. Therefore, there is no reason to believe it is not sustainable. More importantly, there is no reason to believe it cannot continue to grow exponentially going forward. That's number one. Number two on Tata Q. I think MTR is the market leader right now. We're the number two, but that said, I think we've got a long way to go. The addressable market in India is not as big as the export market. While we are increasing our portfolio both from a product as well as a marketing communication perspective for India, I think the bigger focus, Abhi, is to make sure that we are ready for the export markets with all approvals, et cetera. As I said, I think you will start seeing greater traction at the end of Q2, early Q3, as we get our export engine going. Thanks, sir. That's all from my side. Thank you. Thank you. Next question is from the line of Jaykumar Doshi from Kotak. Please go ahead. Yeah. Hi, thanks for the opportunity. When I compare your India business key segmental margins with second half of FY 2020, you know, it appears to be higher both in percentage terms as well as, you know, per unit basis. Even though the prices, when I look at commodity prices of the last couple of quarters versus second half of FY 2020, it's about 20% higher. With 20% higher pricing, you've managed to fully recover and perhaps exceed your previous highs. Is this sustainable or you think, you know, the competitive landscape would force you to reduce the prices further and maybe margins may settle at a slightly lower level? Jay, just to give you a perspective, one of the fundamental assumptions in putting this company together was that we've got a fantastic four-letter brand called Tata, and sub-brands under it which are not getting leveraged. Therefore, if we create a dedicated consumer entity focused on execution against the brands, we will get returns, and that's exactly what you're seeing. Just as a perspective, our direct distribution earlier for beverages was about 500,000, and numeric reach was about 2 million when we started off. End of FY 2020, which you're talking about, this is when Tata Consumer was formed. Right now we are about 1.3 million and our numeric reach is about 2.7. We are seeing that expansion. As we are reaching more outlets directly, there is an upside. Number two, if you observe, we've been ramping up our investment behind brands. Moving from a completely or overwhelmingly push strategy to a more pull strategy, therefore creating better brand power and therefore better pricing power. We have narrowed the indices between us and competition significantly and therefore taken up relative pricing. That's the second piece of margin. The third piece of margin is when you follow a pull strategy, you put a lot of money into trade. As you start taking some of that out, we've redeployed it into brand, and that is why you're seeing the margins go up. I think we're at a fairly comfortable position right now from a gross margin perspective on beverages, and there's no reason to say we cannot continue this, if not improve on this slightly going forward. That's helpful. Thank you. On the foods portfolio, do you need further price increases in salt to offset the inflationary headwinds? Can you talk a little bit about what the incremental inflationary pressure, if at all any, between December quarter and now? What would be the price increase that you may need to offset that? Just as a perspective, Jay, we have taken roughly INR 4 price increase on a 21-rupee. We moved from 21 to 25 from July to April 1. The last price increase that we've taken is just now on April 1. The reason for that is the inflationary headwinds are coming in the form of two pieces. Number one is the fact that there was extended monsoons in Gujarat and therefore lesser brine available to make salt, and therefore brine prices went up and therefore cost of goods went up. That's one piece. The second piece is to convert brine into salt, you do need energy, and large amount of that energy is coal, and large percentage of the coal that you use is imported coal. With the coal prices and shipping prices going up, we've seen a jump of that. Now, overall, we've seen a significant jump in overall costs in Q2 and Q3. Q4 right now, there might be a small increase, but it will not be as steep as what we saw in Q2 and Q3. We have taken a price increase, like I said, in April, in a little bit of anticipation. We will remain nimble to make sure that if needed, we will make sure that we put pricing in play to make sure we are maintaining margins. The more important thing, Jay, I would say is despite taking that pricing, we are continuing to ramp up market share, which just shows the power of the brand and the execution that the team is putting behind it. Overall market share, despite all that pricing that we've taken, which is roughly 19% in a space of nine months, our market share for the year is still up by 400 basis points, yeah? Like I said, we need to stay close. The only thing is there might be a 30-45 day lag between costs going up and us being able to take pricing. Understood. Thank you so much. That's it from my side. Thank you. The next question is from the line of Vishal Gutka from PhillipCapital. Please go ahead. Hi, sir. Thanks a lot for detailed presentation. I just one question. Just wanted to understand on salt distribution. Is it possible to accelerate distribution further? Because this year we have increased the distribution 15% because direct reach is a very critical component for driving the salt business. Was it due to some COVID-led challenges that you are able to increase numerical distribution on 15% during the year? Sorry. Could you just repeat that question a little bit slowly so that we can get it? Yeah. Just on the salt distribution front, is it possible to accelerate the distribution network because direct reach is a very critical component for driving sales of salt. I wanted to know, because this year your increase in numerical reach by 15%. Was it due to COVID-led challenges that you were able to increase only by 15% overall numerical distribution for salt business? Let me say, I would say total numeric reach is the most important piece. Probably direct being slightly higher for salt than for tea. That said, I think right now what we're seeing is, on the metros and, tier one, tier two, towns, we are fairly good on overall numeric reach. I think our gaps or our opportunity areas are more in rest of urban and rural. To get to rest of urban and rural, yes, can we go direct? Why not? I can move from 1.3 to two or whatever, but I think it is more efficient for us to move to a decent number, and I would say 1.5 broadly for FMCGs is a good. It's not best in class yet. It's a good number to target. This year the focus will be to get the multiplier of the wholesale. That is where the focus is. Because one of the commitments that we did make when we formed this company is that we will double our total numeric reach by September 2023, which is 4 million. Mathematically, if I go to a 1.5 million and get a 2.5 multiplier, I will be close to that number to deliver the total numeric reach, which in turn will deliver us volume and market share. Okay, sir. Thank you. Thank you. The next question is from the line of Nikunj Gala from Sundaram AMC. Please go ahead. Good afternoon, everyone. My question is with respect to India food business. India food business except for salt, in, say, next three ro five years, if the company can, you know, ramp up to the kind of a personal goal company has desired, what kind of a margin or ROC level we are looking at? Let me put it this way. I'll say Tata Consumer was formed to become a large FMCG company. At step one, we're becoming a large F&B company. If you look at the opportunities for growth, just from a field of play perspective, there is more opportunity in food and beverages. Therefore, we do expect a significant ramp-up in the food business. Now important thing, as we grow the businesses, you have to remember there is a target long-term stable margin, and there is a margin in the interim while building of those businesses. We are very, very mindful about the businesses that we are getting into, whether it is organic or inorganic, to make sure that the long-term margin profile of the business is accretive to our current portfolio. That said, going forward, you could see, investment in businesses, to make sure that we are coming up to par to scale. I wouldn't hazard a specific number to you, but do expect a double-digit growth in the India food business with margins, continuing to improve as we move forward. Sure. The question was like, for example, in the spices, can we go up to what peers are doing, the margins? Or, even at the aggregate level, do you believe the margins should be in line with what companies, you know, delivering right now? Every category that we play in, we aim to be in the top two or three players. The top two or three players, not only in terms of volume and market share, but also in terms of margin. There is no reason we cannot get to industry margins in any of the categories. That said, over a period of time, it will not be instantaneous because, A, you have to build scale, second, you have to build the brands. Sure, sir. Sure. The second question, you know, with respect to the media articles stating that, you know, the company is planning to get into the home and personal care through, you know, acquisition led strategy. Just wanted your thought on that. I'll repeat what I said is Tata Consumer was formed to fulfill the FMCG ambitions of the Tata Group. At step one, we have done a F&B company, and moved from being beyond just a tea and salt company. That's number one. Number two is if you go by the group norms of simplify, synergize, and scale, for the last two years, while we have been doing a bit of scale-up, the focus has also been to simplify and synergize the businesses. The last simplify and synergies being the Tata Coffee and the international restructuring. Now that we've broadly done with the heavy lifting, and there will be a continuous focus on synergies, for example, on costs, et cetera. Now you could see traction on the scaling up perspective. I wouldn't comment on speculative articles on which category we are getting into or which we are not. All that I would say is any category that we get into, we are very, very mindful about, A, the potential or the scale for that category, the margins in that category, the number of brands that play in that category, whether it is too fragmented, consolidated, what does the Tata brand name do, what are the capabilities that we have? That's number one. Number two, every category that we will consider, we will also look at is the best bang for the buck going organic or inorganic. We will become a large FMCG company. We will have scale. We will deliver superior financial returns, but over a period of time. Sure. Thank you for that comment. Just on that, is there any threshold ROC you look at when you consider any category or, you know, any product in that way? Or, you know, just a ballpark number you work with that, you know, that's a good ROC to work with to get into the category? Yeah, that was my last question. I don't think we only look at ROC when we enter into categories. Just for example, in pulses, ROC is almost infinite, right? Because there is no capital. I mean, we are using third parties. It's just working capital and inventory that we're holding, and we're selling it off. ROC is not the only determinant. The determinant is the scale of the category, the margins in the category, how accretive is it to our business? Do we have the capabilities to synergize and scale? For example, getting into a cold chain doesn't make sense for me right now, maybe it's later, but today no cold chain products will be on the table irrespective of the ROC or the margin, because I do not have synergies. There are multiple things that we consider when we get into a category to make sure that ultimately at Tata Consumer we are creating financial value. Sure. Yeah. Thank you. Thanks. Thanks a lot. All the best. Thank you. The next question is from the line of Percy Panthaki from IIFL. Please go ahead. Hi, sir. My first question is on costs. When we had acquired the consumer business of Tata Chemicals, we had said that there are a lot of synergies not only on the top line, which I understand, but also in terms of costs. We have realized a lot of those synergies. I remember you mentioned that there was one redundant layer of distribution which you removed, et cetera. What I want to understand is where we are in that journey of realizing cost synergies from the merger. Are we sort of 50% through our journey? Are we 80% through? Some kind of a flavor you can give on that. Sub-question to that is, apart from cost synergies from the merger, are there any other low-hanging items in terms of sort of cost rationalization which you can implement? See, there will always be some cost rationalization possibilities for any FMCG companies, even after a century of existence and sort of good management. I'm not talking about those. I'm talking about something more obvious and something more sort of low-hanging, which you can extract over the next one or two years. These two sub-questions to my first question. Yeah. Percy, we had made an announcement of taking out between 100-150 crores of synergies. Now, you're right, I mean, top line is a derived calculation, but costs are real, right? We were presenting the amount of costs till, I think, about September quarter, if I'm not mistaken, where we had almost delivered that entire 100-150 crores, and it came in various pieces. It was layers of management system. It was layers in the supply chain with the super distributors and 3PLs. It was with beverages and tea operating as two separate units. It was as an integrated structure. It was in procurement, multiple pieces. We have delivered that. The proof of the fact, apart from just like you ought to believe the management when they say that they delivered is the P&L itself, right? We have fueled significant amount of new categories and invested behind those categories. Number one, even in the core business, we've ramped up our A&P significantly while continuing to deliver improved financial returns. All that is possible simply because we've been taking costs out from the P&L, large part of that from the synergies. Just for example, even in this presentation I showed you, the secondary freight per kilometer is down by more than 25% just because we combined the salt and tea, and that's a mathematical proven number that is on the table. Synergy is almost completely delivered as commented, but as you rightly said, it is not a one-stop per se. We will continue to look for synergies. Just for example, right now we've announced the Tata Coffee merger and the international restructuring. There is significant money on the table. Apart from the simplification, legal, management teams, et cetera, there is tangible value on the table, which we will take out. But that we will quantify once we finish the entire exercise. You could expect a significant number to come out. That's number one. Number two, the example that this is a constant exercise and we will keep looking for it, looking for opportunities is as we expand the Sampann portfolio, for example, we are leveraging 3P manufacturers across the country. As we grow this business aggressively, we have to look at the footprint that we operate in, because between freight and sourcing is where there is a significant amount of money. We've just finished an exercise which significantly changes parts of our footprint on sourcing and logistics. Again, with a significant build in terms of synergies to be realized at the end of it. It is an ongoing exercise. I would say 3%-5% productivity on the cost angle will be a constant endeavor for this company going forward. Right, sir. Second question on Starbucks, and you've done very well in terms of store expansion and city expansion footprint, etc. I just want to also spend a little time on the margins. What my understanding of this business, having studied other QSR formats, is that typically beverages versus food, beverages has an edge in terms of better gross margins. Secondly, also, given where Starbucks' price points are, which are definitely at a premium to other sort of chain in the industry, I would have thought that margins would be better, especially now since you're 250 stores plus, so the scale is not a big issue anymore. My expectation is that for a format like this, pre-Ind AS 116 and pre-royalty, EBITDA margin should be close to 20%, and I don't think we are there yet. Do you think that's a fair target, first of all? If yes, what is required for us to go to that level? Percy, I would not dispute your target of the 20% margin, and I will say we're quite close to that. We're not way off, right? You have to remember the margins is a function of also the total cost that we are bearing and the throughput that we're getting through. During COVID and closures, we've had significant issues in terms of the traffic in the stores, and therefore, the drop in revenue, while the costs have not changed significantly. We have managed to bring down costs a bit, but they have not changed significantly. The revenues dropped, and therefore, the net margins have come down on the EBITDA level. That said, right now we're seeing them come, I would say, between a 15%-20%, and therefore, we do not see an issue in ramping up going forward. Yeah, Percy, just one other point you need to bear in mind is what you're saying without commenting specifically, but overall profit numbers will be different in a steady state than when you're expanding. We have opened, as Sunil said, over 25 stores in the last quarter, right? We are not in steady state yet. Please remember that. Sure. Just a clarification on this. This 15%-20% number which you spoke about, is that a number which is pre-Ind AS 116, or it is under the 116 reporting standard? Let's have a conversation offline, Percy. Sure. Sure. Percy, just to give you some more color on that, revenue grew by 76% and EBITDA grew by 160%. Yeah. Just the throughput or the traffic in the stores itself moves up the EBITDA in a big way. As I said, on the out-of-home piece, I think for NourishCo and Starbucks, the last quarter were almost normal apart from the Omicron hiccups that happened. You could expect to see these pieces ramping up as we go forward. Okay, sir. That's all from me. Thanks a lot. Yeah. Thanks, Percy. If I could just request everyone to limit their question to one, because I think we are running out of time. You can come back in the Q. Thank you. This is the operator. Should we take the next question? Yes, please. Thank you. The next question is from the line of Sumant Kumar from Motilal Oswal. Please go ahead. Yeah, hi, sir. My question is regarding tea margin. In month of April, we have seen CTC leaf prices gone up by 12%-16%. You have talked about the tea price likely to correct. If it is not going to correct, can you talk about how things are going to be for the price increase side and margin side for the tea business in the next couple of quarters? Sumant, let me comment in two different ways, yeah? Number one is as tea prices go up or down, we will modify our pricing in the market to make sure we are more or less maintaining margins while maintaining competitive stances and volume momentum. That's number one. Number two, just as a perspective, in the month of April, if I'm not mistaken, while there was some small uptick in the North Indian teas, South Indian teas saw a downward pressure. That's number two. Number three, April is probably the wrong month for making a conclusion on tea pricing because the first flush happens about May, and from May onwards is when you could see the price movements going up or down. Broadly, like I said, tea prices were range-bound in the last quarter per se. We will see some ups and downs, but not as significant as what we've seen in FY 2021 and quite a large part of the beginning of FY 2022. If we have a normal crop this year, you could see downward pressure on prices overall. Anything that moves up or down, we will make sure that we are moving our algorithms in line to make sure maintaining margins and maintaining momentum. Okay. Last question, the other expense is higher in Q4. What are the key reason for that? Sorry? Other expenses is higher in Q4. Yeah. It's not only in Q4, but overall. You know, other expenses, there are a number of reasons. First is the fact that we are investing in infrastructure, whether it's sales, digital, as we expand. Second is compared to the previous year. There are new businesses which have come in like Soulfull, like, Tata Q. Third reason is we are ramping up Sampann and other things. There is an element of inflation which all of us have. All these are contributors. Okay. Thank you so much. Thank you. The next question is from the line of Trilok from Dymon Asia. Please go ahead. Sir Trilok, your line is in talk mode. Please go ahead with your question. Sir Trilok, please unmute your line from your side, it's muted. As there is no response from the current participant, we'll move on to the next question. Moderator, perhaps please go to the webcast now, and take some questions from there, yeah? Sure. There is a question from Alok Shah at Ambit. He's asking when distribution in tea and salt has increased by 16% and 13% CAGR over FY 2020 to 2022. Wanted to check how much more distribution is yet to be covered. Against this distribution expansion, tea and salt volume growth CAGR has been 7% and 9% over the same period, which is lower than the distribution expansion. Is this understanding and how do they reconcile this? I'll answer this in two or three parts. As I mentioned, our target in terms of numeric reach is 4 million outlets. We are at a 2.7 million, so we've got at least 50% more ground to cover. At a 4 million outlets, I think we will be in the top quartile of FMCG companies. That is the target. That's number one. Number two, I don't think you can do a direct linkage with the distribution expansion for the same time period because this takes time to build up. Number two, as we are expanding distribution, as I mentioned, rest of urban and rural is the opportunity where we would expect to see slightly lower volume/value throughputs. Number three, it is also a function of industry ups and downs. While long-term, the beverage industry in India, for example, the tea industry, has been growing between 5% and 7% volume, we have seen significant softness in the beginning part of this year. As I said, January and March, two months, have come in at a 5% volume growth, and the industry looks to be coming back. I would not draw a straight line correlation. I would urge to go on the hypothesis saying that, A, if you're present in 4 million outlets, if you've got strong brands and therefore share of handlers, therefore you will be gaining volume, market share, and therefore a good bottom line at the end of it. Thanks, Sunil. He has another question. Perhaps LK can take this. ICDs have gone up from INR 730 million to INR 4.99 billion. Can you share some more details on the same? Okay. This is, you know, a deployment of surplus funds. You know, we have preferred deposits with strong companies. For example, HDFC is one company where we place deposits. They are not within the group. They are when we get a better return than employing them in short-term mutual funds. These are examples of where we place it. The last question is: What is the gross margin profile of NourishCo versus tea business? Broadly, the gross margin profile of NourishCo is in the top part of the tea business. In fact, once we get our innovation engine fired up, it should be slightly accretive to where the tea business would be on a steady state. As I said, the big opportunity in NourishCo is that even after the expansion that we've done, I think we've still got about 45%-50% geography of the country to cover. NourishCo has not delivered to its full potential on the bottom line simply because it has been hindered by the two waves of the second wave and the Omicron, which we've seen. I'm keeping my fingers crossed that this is the first full year in which they see a full summer and would have executed in all the expanded geographies that they have operated in. You should start seeing significant traction on that business. I think we can go back to the Q&A queue, and perhaps we can extend the call by 10 minutes so that we can address rest of the questions. The next question is from the line of Vivek Jain from Ratnabali Investments. Please go ahead. Hi. I just wanted to understand what is the growth strategy for Sampann. I see Sampann is one of the biggest growth drivers of the Indian business. I just wanted to understand in the bigger scheme of things, what would your strategy be going forward on a long-term basis? I can go on for about half a day on the Sampann growth strategy, but to just give you in a nutshell, Sampann is going to be the pantry brand for us, and therefore all the categories that we will enter with Sampann is pantry. Right now we've got spices, we've got pulses, we've got besan, all of which are doing very well. Poha has grown more than 100%. Overall, Sampann has grown by more than 30%. Sampann, the other categories have been identified in which to enter. We've just entered the dry fruit category, which again is a high margin but trust deficit category because there is no big brand operating there. Sampann, I think the critical piece is to make sure, A, we get into the right categories, B, we build the brand on which I think we've got a lot of work to do. C, expand distribution. D, more, most importantly, once we get to a certain level of scale, start leveraging procurement at the back. Lastly is start putting in value-added innovation as we go through to make sure we move up the margin profile. Okay. A little bit of guidance as to can we expect growth of more than 30% going forward? I would say you can expect very healthy growth across TCPL, but Sampann should be outpacing the TCPL growth number significantly. Sure. Thank you. That was helpful. Thank you. Next question is from the line of Shirish Pardeshi from Centrum Capital. Please go ahead. Hi, Sunil, Nivi, LK, good afternoon. Thanks for the opportunity. I have one question. In reference of slide number 13, where you have seen strategic priority six pillars. I would like to see in the context, you said you have holding about INR 2,500 crore cash. The point what I wanted to understand is explore new opportunities. What is it that you're looking? Are you looking for brand, channels, B2C or format? That would be helpful. Sub-question on that, did you acquire brand Soulfull and Tata SmartFoodz, in the medium to long term, say three years, what is your expectation in terms of scale, distribution, profitability and maybe a revenue quantum? Let me answer the first part of your question. The INR 2,400 cash is kept ready and powder dry to deploy in case we see opportunities. I think the critical piece is creating value for Tata Consumer. We are extremely mindful of the return ratios of the business, but also we've got to make sure that we fulfill the ambitions in terms of scale. Every opportunity is looked at from every multiple angle to make sure it is creating value. Soulfull for example, and that's a classic example that I can give you. Great brand in the geographies which it was operating, and we thought we can scale it across the country. They had a unique proposition of millets, which was a differentiated proposition from a consumer perspective. Also, different entry barriers, simply because they possess the technology to process millets very efficiently, which not many companies can. Number four, they brought in a great team. We have leveraged that by keeping the team separate and only integrating where TCPL will create value. Is there a specific one piece that I can give you saying we will go deploy against brands or we'll deploy against B2C? No. We look at every possible opportunity that is there. There is a set of targets that we have, which we go after, but it has to create total value. As I said, every single acquisition has to pass strategic filters, as I mentioned, but also more importantly, the financial filters for us to make sure that it is value accretive. On the two acquired brands, medium to long term targets, say three to five years, where do you think the business can go? I think it is to multiply the top line and the bottom line multifold for all the businesses. Soulfull is already on its way. Like I said, it had a slow start just because of two things. One is we had to integrate that business, and number two is I think we took a little bit of more time to understand the category, because we have never operated in that space earlier. Now that we've got it, now it is into triple digit growth for the last couple of months, and we expect to continue a very, very strong momentum going forward, apart from the fact that we will expand portfolio. On Tata SmartFoodz, I did mention earlier that we have work in progress going on to... We've already integrated the business, but from a portfolio angle, and more importantly, the big bang for the buck will be the export markets, making sure we have the brand, the product portfolio, and the regulatory approval to start wrapping up that business. Let me take a little more, Sunil. I have tested both the brands and I feel I'm a big fan of processed food. Why, if I give anecdotal evidence, McCain came in India with potato wedges for long time, but they've not been able to scale up. Of course, I'm not saying the time is different. Today time is very different. Say, in a medium- to long-term, say, to reach, say, INR 10 billion brand, do you think you will require four years, five years, six years? I wouldn't give you a specific number one, and I wouldn't try to draw parallels because I can give you the name of one of the big competitors in India who did try to get into salt as well as atta, right? There are other players like we have succeeded in salt and someone else has succeeded in atta. Just because a player tried a category and did not succeed doesn't mean others can succeed or fail. Every company has to evaluate what its strengths are, where are they playing to make sure you are differentiating, make sure you have the ability to execute, and then go for it. As I said, Tata Consumer, we've got lofty ambitions, but as I just said just now, I think we've just about seen 10 minutes of a two-hour movie. We've got a long movie to go. Stay tuned. Sure. Thank you. Have a good day. We can just take one last question now. Sorry. Is from the line of Bharat Sheth from Quest Investment Advisors. Please go ahead. Hi, Sunil. Congratulations on good set of numbers. You have answered, I mean, on the product portfolio expansion of Soulfull as well as, I mean. On NourishCo, how do we really look? Second, this ready-to-eat, so it will be among the whole, I mean, full kind of a way. Right now we have Soulfull, which is for morning breakfast. How do we expand that portfolio on the one is hygienic or nutri side and then NourishCo. The export engine that you said, so in how do we see this distribution model will be there for export? If I understood the question right, I think NourishCo, we've got a huge opportunity for growth. Just for example, NourishCo grew by close to 90% for the year, right? Okay. This is without having a normal year. I think the product portfolio that they have with Tata Gluco+, Tata Copper+, Himalayan, we just introduced Fruski, we've just launched the Tata ORS+, we just launched the jelly variant. I think just expanding in the beverage spaces where we can create a differentiation and value for the consumer and executing against it, I think we're in a good place on NourishCo. On Soulfull, I think the core differentiator is millets. Soulfull was brought in to specifically cater to the demand spaces of breakfast, snacking and mini meals. Therefore, the portfolio that you will see coming out of Soulfull, I think the first product should come out by... New product should start coming out by end of this month, early next month, is in the same space, the big differentiator being millet and superior products, per se. On Tata SmartFoodz, like I said, there is work in process to make sure that we've got a portfolio which appeals to the Indian consumer as well as for the international market, appeals to the international consumer. In international, we will play both the ethnic as well as the world food aisles in the mainline supermarkets. Okay. Any, I mean, thought process on the revenue from these three business contribution on the top line and EBITDA in over three to five years timeframe? Both on top line as well as EBITDA, we would expect it to be incremental and significant. I wouldn't hazard a guess to give you a number in the future, but just to prove to you past performance, I mean, the boilerplate here is past performance is not a guarantee of future performance. We've grown this year, the growth businesses have grown 52%. Our endeavor will be to continue to maintain that momentum going forward. Okay. Thank you, and all the best. Thank you. Ladies and gentlemen, that was the last question for today. I would now like to hand the conference over to Ms. Nidhi Verma for closing comments. Yes, thank you. Thanks, ICICI for hosting us. On behalf of the management, thanks everyone for joining us. If you do have any remaining questions, please get in touch with me. Thank you. Thank you. Ladies and gentlemen, on behalf of ICICI Securities Limited, that concludes this conference call. Thank you for joining us. You may now disconnect your lines.