EUR 120.00 For Business Accounts Only

MOSL: TATA CONSUMER PRODUCTS (Buy)-On course for growth

(TATACONS IN, Mkt Cap USD8.6b, CMP INR729, TP INR900, 24% Upside, Buy)

• TATACONS’s FY22 annual report focuses on six strategic initiatives identified by the management to strengthen its foundation as a strong consumer products company. These include: 1) accelerating the core business; 2) driving digital and innovation; 3) unlocking synergies; 4) creating a future-ready organization; 5) exploring new opportunities; and 6) embedding sustainability. The key takeaways are:

Laying the groundwork for future growth

• TATACONS has made significant progress on key strategic initiatives laid out to build a focused consumer products company.
• Strengthening and accelerating the core business: In FY22, TATACONS expanded into new target markets, launched regional focused packs, unveiled impactful campaigns across multiple platforms, and drove premiumization. It met its direct reach commitment of 1.3m outlets in India by the end of Mar'22. It gained ~100bp/400bp market share in core categories such as Tea/Salt.
• Drive digital and innovation: TATACONS's innovation efforts are focused on understanding and pre-empting evolving consumer trends and coming up with high-quality and differentiated products to delight these increasingly discerning consumers. The contribution of innovation to turnover has increased by 2x YoY in FY22. The e-commerce channel performed well, with its share of revenue increasing to 7.3% in FY22 v/s 5.2%/2.5% in FY21/FY20. The management is focused on driving growth in this channel and strengthening its digital market presence.