Chairman
I hope this letter finds you in good health and spirits. As we navigate through the challenges of the past year and set our sights on the future, it is imperative to acknowledge the challenging global landscape we operate in. From the recent pandemic to ongoing geopolitical tensions, the world is facing a period of uncertainty. Geo-political shifts are reshaping supply chains, while energy security and transition gain momentum. Artificial Intelligence (AI) is moving into the mainstream, boosting productivity and opening doors to novel product possibilities. On the economic front, despite initial recession fears, the global economy has displayed resilience, avoiding major recessions or significant spikes in unemployment. Nevertheless, the outlook for global GDP growth remains subdued reflecting the ongoing challenges and uncertainties.
Amidst this global backdrop, India is emerging as a bright spot, defining its role in the new world order. The Indian economy has shown resilience and adaptability, even in the face of global headwinds. Supported by strong balance sheets, a healthy banking system, favourable corporate tax rates, a thriving capex cycle and a robust public digital infrastructure, India is poised to lead the next decade. India’s consumer market presents a vast opportunity, driven by a young population, a growing middle class, rapid urbanisation, increasing disposable incomes and rising aspirations.
At Tata Consumer Products (TCPL), we recognise the immense opportunity that the Indian consumer market presents for the next decade and beyond. Since its formation in 2020, TCPL has been on a transformative journey towards becoming a complete FMCG company to capitalise on this tremendous opportunity and cater to the evolving desires of the Indian consumer. Our strategic actions have been aligned towards this vision and we have been making investments in key capabilities in order to scale for the future, including bolstering our Sales & Distribution network with a focus on building E-commerce and omni-channel orientation, embedding digital across the organisation, building out our supply chain with a focus on efficiency, resilience and agility, and building best-in-class innovation capabilities.
Sustainability continues to be integral to our strategy. During the year, we announced sustainability targets for FY 2025-26, reaffirming our long-term commitments across four key focus areas: ‘Better Sourcing’, ‘Better Planet’, ‘Better Communities’, and ‘Better Nutrition’. These commitments are aligned with Tata Group’s ‘Project Aalingana’, outlining the Group’s strategy for a sustainable and equitable future.
FY 2023-24 has been a milestone year for Tata Consumer Products in many aspects. The success of our innovation strategy is reflected in the 5X growth in innovation revenue in the India business over the past three years. Additionally, in our efforts to reach more consumers, we made significant progress in expanding our Sales & Distribution network, now reaching a total of 4 million outlets. This represents a remarkable two-fold increase since 2020. During the year, we also made further progress towards our portfolio transformation ambition with our growth businesses recording 40% growth in FY 2023-24. Together, they now account for 18% of India business.
In line with its ambitious growth agenda, your Company acquired Capital Foods and Organic India, both renowned for their strong brands, distinctive product portfolios, presence in our international markets and strong supply chains. These acquisitions substantially expand our total addressable market into adjacent high-growth, high-margin categories. We are well-positioned to unlock their full potential, leveraging our robust Sales & Distribution platform, multi national footprint, strong back-end operations and leading R&D facilities.
In the continued drive for simplification, your Company has completed the amalgamation of Tata Coffee and made significant progress in consolidating the number of international legal entities. We have also announced the integration of Tata Soulfull, NourishCo, and Tata SmartFoodz, which will result in unlocking value and improved efficiencies.
I am pleased to share that your Company continued its trajectory of strong financial performance this fiscal and delivered revenue of 15,206 Crores, a growth of 10%, with an EBITDA margin of 15.3%. The highlight this year is the superior bottom-line growth led by improved profitability and margins across businesses. In the four years since the formation of your company, the revenue and group net profit before exception items have seen a 12% & 21% CAGR, respectively. This is amongst the best in the industry and continues to improve.
This success is attributable to the dedication, resilience, and hard work of our people. Moving forward, initiatives to attract, retain and motivate talent for sustained growth across categories and geographies will be crucial. We have strengthened our focus on talent management and building a robust leadership pipeline.
Looking ahead to FY 2024-25 and beyond, I am bullish about our prospects and confident in our ability to navigate the evolving landscape successfully. We remain committed to executing on our strategic priorities, driving sustainable growth and delivering value to our stakeholders.
On behalf of the Board of Directors and the management team, I would like to express my heartfelt gratitude to you, our shareholders, for your unwavering confidence and support. It is your faith in our vision and strategy that has propelled us to achieve significant milestones, including reaching a market capitalisation of Rs. 1 Lakhs Crores during the year.
Thank you for your continued partnership as we embark on this exciting journey towards a promising
future.
N. Chandrasekaran
Chairman