Tata Consumer Products eyes further acquisitions after Capital Foods and Organic India deals

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March 4, 2024

After acquiring Capital Foods and Organic India, Tata Consumer Products Limited (TCPL), a fast-moving consumer goods (FMCG) manufacturer, is prepared for further acquisitions. According to a senior company official, TCPL is actively seeking new acquisitions that bring substantial operational value to the company.

In the meantime, the company has established a goal of integrating its latest acquisitions, Capital Foods (valued at INR 5,100 crore) and Organic India (valued at INR 1,900 crore), into the business within 100 days.

Continue Exploring: Tata Consumer Products set to expand portfolio with strategic acquisitions of Capital Foods and Organic India

Ajit Krishnakumar, COO of Tata Consumer Products Ltd said, “We are in the process of integrating Capital Foods and Organic India, which is substantial and amounts to a total of INR 7,000 crore. From an operational perspective, there is no reason that we will not look for acquisitions. We remain disciplined. We have to define the criteria, which is that it should be worthwhile, and we will pursue it. We will not be running away because of the price, as long as the acquisitions meet the criteria; we have the position to continue with it.”

The Mumbai-based company revealed its acquisition of both firms on January 12th. It noted that the sectors in which these companies operate are experiencing growth rates ranging from 15 to 20 percent compared to their foundational categories. TCPL intends to consolidate the three manufacturing plants of Capital Foods into its existing manufacturing infrastructure. Previously, the company had acquired Kottaram Agro Foods, headquartered in Bengaluru.

Continue Exploring: Tata Consumer Products approves INR 6,500 Crore fundraising for Capital Foods and Organic India acquisitions

“We have platforms that we are interested in that include pantry and mini meals. We have also talked about proteins. We have defined our interests for several reasons which start with what brands will work, distribution strategy etc. We want to grow and will tap into opportunities. It could be a mix of inorganic and organic growth,” added Ajit Krishnakumar.

The company’s distribution network spans 3.9 million outlets across India, with direct access to 1.5 million of them.

TCPL is gearing up to establish a specialized pharmaceutical distribution network featuring Organic India’s product range, which encompasses capsules containing Tulsi, ashwagandha, and Triphala. Additionally, TCPL will market its own in-house products, such as GoFit plant proteins and Soulfull products, through pharmacy channels.

Continue Exploring: Tata Consumer Products to tap pharma channels with Organic India and expand Capital Foods into oriental cuisine space

Poultry companies set for 5-6% revenue growth in FY2025, says ICRA

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March 4, 2024

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Credit rating agency ICRA expects the revenue growth for its sample set of domestic poultry companies to improve mildly to about 5-6 per cent in FY2025 after an estimated modest Year-on-Year (YoY) growth of about 3-4 per cent in FY2024.

According to ICRA, the growth will be driven by demand improvement, increasing share of organised players and growing preference for value-added products.

“While broiler meat realisations continued to be strong till 7M FY2024 (YoY growth of about 2 per cent), they started tapering thereafter due to high placement and excess supply in key markets,” ICRA said in its recent report.

Subsequently, Q3 FY2024 witnessed a about 10% Quarter-on- Quarter (QoQ) drop in average realisations, resulting in overall flat average numbers in 9M FY2024 on a YoY basis. The same could revive gradually, as the oversupply scenario corrects over the next few months, ICRA said.

Continue Exploring: Popeyes makes grand debut in Delhi’s Chandni Chowk, delighting chicken aficionados

While realisations improved in 7M FY2024 following controlled supply and healthy demand, poultry companies’ earnings were further supported by softened feed costs, ICRA said.

Average maize prices during April-November 2023 decreased by about 9 per cent vis-à-vis FY2023. Likewise, soybean prices softened in the current fiscal and average prices in 9M FY2024 declined by about 14 per cent vis-à-vis FY2023. However, the realisations started tapering from November 2023 onwards and the grain prices, particularly maize, also started rallying since then, ICRA said.

Further, significant contraction in soybean harvest during the kharif season and delayed sowing of maize may result in a potential spike in feed costs and is likely to exert pressure on the margins of poultry companies over the next few quarters, ICRA said.

Continue Exploring: India’s food boom: Agro, dairy, poultry sector surge sparks growth for local brands

Zomato’s shares reach record high of INR 175.5 amidst bullish market sentiment

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March 4, 2024

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Zomato, a major player in the foodtech industry, saw its shares surge to a record peak of INR 175.5 during early trading on the BSE on Monday, March 4th.

The stock, which has been experiencing an upward trend since mid-April last year, surged nearly 5% during intraday trading to reach its all-time high.

Even last Friday, the stock surged almost 5% intraday to touch the previous all-time high of INR 173.45.

Continue Exploring: Zomato’s bull run continues: Stock jumps 5%, setting new record peak

Following its rally earlier today, the shares retraced some of their gains to conclude the day with a 1.3% increase, reaching a new record closing price of INR 169.75 on the BSE.

Currently, Zomato is trading at a level last observed in November last year, when it had reached a record intraday high of INR 169.1.

Since its listing in July 2021, Zomato’s shares have experienced significant fluctuations. In the backdrop of a downturn in the global tech sector, the company witnessed a substantial 60% decline in market capitalization in 2022. Moreover, apprehensions surrounding its losses and the acquisition of the loss-making Blinkit contributed to the challenges faced by shares of the startup led by Deepinder Goyal.

However, as the startup reported its first profitable quarter in Q1 and continued to grow its profits every quarter thereafter, the market sentiment towards the stock became positive.

Although its primary food delivery segment experiences sluggish growth, the strengthening fundamentals of its quick commerce division, Blinkit, have sparked bullish sentiment on the stock among investors.

Presently, the company is expanding its roster of brands and introducing fresh categories on Blinkit, positioning itself to compete against ecommerce giants like Amazon and Flipkart.

Continue Exploring: Zomato’s Blinkit set to ramp up e-commerce deliveries with diverse product range

During its most recent reported quarter, Q3 FY24, Zomato recorded a profit after tax (PAT) of INR 138 Cr, marking a substantial 283% increase quarter-on-quarter.

The company’s shares have surged by over 37% since the beginning of the year.

Continue Exploring: Zomato reports third consecutive profitable quarter with INR 138 Cr PAT in Q3 FY24

FMCG giants boost advertising spend, surpass pre-Covid levels amid economic boom

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March 4, 2024

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consumer goods shopping — (Representative Image)

In the December quarter, advertising expenses as a proportion of sales at leading fast-moving consumer goods (FMCG) companies exceeded pre-Covid levels for the first time, reflecting a push to spur demand amid a booming economy.

According to a study by ET, Dabur, Colgate-Palmolive, Emami, Godrej Consumer Products, United Spirits, and Jyothy Labs have surpassed their FY19 levels. Hindustan Unilever (HUL), India’s largest consumer goods company, and Marico have seen increases in advertising and promotion (A&P) spending, but it has not yet reached pre-Covid levels.

The study encompassed eight companies that have consistently provided A&P data since fiscal year 2018.

Advertising expenditure experienced a widespread decline during the pandemic and was further constrained by inflation.

Continue Exploring: FMCG giants raise prices by up to 10% to bolster profits amid slow demand recovery

India’s economy saw a significant surge, reaching a six-quarter high of 8.4% in the period of October to December, as per data released on February 29th.

According to industry executives, the A&P recovery suggests that companies are gearing up to intensify their advertising efforts in response to heightened competition from regional brands. This move comes amidst a decrease in input prices, as they aim to stimulate demand recovery.

In the December quarter, Colgate-Palmolive’s A&P expenditure accounted for 14.64% of sales, compared to 12.65% in FY19. Similarly, for Jyothy Labs, the A&P expenditure was 8.97%, as opposed to 6.18% in FY19.

Recently, Hindustan Unilever‘s chief financial officer, Ritesh Tiwari, informed investors that the A&P spend in the December quarter stood at 10.7%, marking a 270 basis points increase compared to the previous year.

One hundred basis points is equivalent to one percentage point.

“Our absolute A&P investments were almost INR 400 crore higher than last year as we continue to invest competitively behind our brands,” he said.

In the nine months leading up to December, HUL recorded a 33% increase in advertising and promotion spending compared to the previous year.

FMCG companies are among the largest advertisers in the country, benchmarking their ad budget as a percentage of sales.

Continue Exploring: FMCG demand in India faces continued decline, Kantar predicts further downturn

Safari Industries raises INR 229 Crore in funding from Lighthouse’s AIF, eyes expansion in Indian luggage market

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March 4, 2024

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Safari Industries (India), a prominent luggage brand, has raised INR 229 Crore (around $27 million) in fresh funding from the growth-stage venture capital firm Lighthouse‘s fourth alternative investment fund (AIF).

According to the official statement, this marks the second investment made by Lighthouse in the company.

Last week, Lighthouse invested INR 284 Crore in Kushal’s, facilitating a partial exit for its initial institutional investor, India SME Investments.

Lighthouse’s portfolio includes companies such as Bikaji Foods, Nykaa, Duroflex Mattresses, Fabindia, Ferns N Petals, Cera Sanitaryware, Dhanuka Agritech, Kama Ayurveda, and Kushal’s Retail.

Continue Exploring: Luggage brand Nasher Miles bags INR 3 Cr investment on Shark Tank India 3

Safari’s chairman and MD Sudhir Jatia said, “Indian luggage market still remains highly unorganised, and we intend to leverage Lighthouse’s experience in building high-quality brands as we penetrate deeper into the Indian market.”

Safari produces and sells a wide variety of luggage bags and backpacks. The company boasts over 800 stock keeping units (SKUs) and a network of 9,300+ customer touch-points across online and offline platforms.

Media reports indicate that last year, the company provided an exit opportunity to one of its investors, Investcorp, achieving an impressive internal rate of return (IRR) of 102%. The total return for the investor stood at INR 285 Crore, resulting in a remarkable 3.8x multiple on the initial investment of INR 75 Crore.

Safari competes with VIP, American Tourister, as well as startups such as Mokobara, Nasher Miles, etc.

The announcement follows closely after Mokobara, its competitor, successfully secured $12 million in funding led by Peak XV Partners, elevating the startup’s valuation to $80 million. Mokobara currently operates numerous stores in Bengaluru, Delhi, Mumbai, and Pune, with plans to expand further by opening an additional 25 stores by April of this year.

Continue Exploring: D2C luggage brand Mokobara secures $12 million in funding from Peak XV Partners, existing investors

As of 2024, the Indian luggage industry market is valued at $15.05 billion, with a projected compound annual growth rate (CAGR) of 5.21% expected by 2028, according to a market study.

Flipkart Internet receives INR 924 Crore cash infusion from Singapore entities

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March 4, 2024

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Flipkart’s marketplace arm, Flipkart Internet, has received a cash infusion, raising about INR 924 crore ($111 million) in two parts from its related entities based in Singapore.

According to ROC filing, the ecommerce giant backed by Walmart received new funding from its affiliated entities based in Singapore on January 8 of this year. The company sanctioned two resolutions to inject capital into it on December 20 and 22 of the previous year.

ET was the first to report this development.

Earlier reports suggested that Flipkart was exploring the possibility of raising a new round of funding worth $1 billion, with Walmart pledging $600 million. This new injection is expected to value Flipkart at approximately 5-10% higher than its previous valuation of $33 billion.

However, Flipkart confirmed Walmart’s infusion of $600 Mn in the company but said that the rest is speculative.

Continue Exploring: Walmart invests $600 Million in Flipkart as e-commerce giant gears up for $1 Billion funding round

Last year, Walmart acquired additional shares of Flipkart, purchasing Tiger Global Management’s shares for $1.4 billion and providing the hedge fund with an exit from the company.

This comes at a time when Flipkart is experiencing significant growth in sales. The Big Billion Days event held in October last year marked its largest ever, attracting approximately 1.4 billion customers over the course of eight days (8-15).

Flipkart Internet generates its revenue predominantly from commission charges and additional services provided to merchants, such as product advertising. Its operating revenue surged by 42%, reaching INR 14,845.8 billion in the fiscal year 2022-23 (FY23), compared to INR 10,477.4 billion in FY22.

The ecommerce giant saw a 9% reduction in its net loss, which decreased to INR 4,026.5 billion in FY23 from INR 4,419.5 billion in FY22. Total expenditure increased to INR 19,043 billion in FY23, with ESOP costs amounting to INR 2,155 billion.

Meanwhile, Amazon India’s marketplace business, Amazon Seller Services, recently secured INR 830 crore from its US parent company. As part of this capital injection, Amazon Seller Services has allocated 830 million equity shares to Amazon Corporate Holdings Ltd and Amazon.com.inc.

Continue Exploring: Amazon India’s marketplace division sees INR 830 Cr investment from US parent

Amul’s first Ice Lounge in Northern India opens in Lucknow, bringing exotic ice creams from around the globe

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March 4, 2024

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The Gujarat Co-operative Milk Marketing Federation (GCMMF), known for its Amul brand of dairy products and with a turnover of over INR 80,000 Cr in the fiscal year 2023-24, has inaugurated its first Amul Ice Lounge in Northern India at Phoenix Palassio Mall, Lucknow.

The Amul Ice Lounge at Lucknow was inaugurated by Shri Bhupendrabhai Patel, Hon. Chief Minister of Gujarat, Shankarbhai Chaudhary Hon. Speaker of the Gujarat Assembly and Jagdish Vishwakarma, Hon. Minister of Co-operation, Gujarat.

The Amul Ice Lounge offers a lavish setting for patrons to savor a selection of 24 top flavors from 24 countries worldwide, crafted with the finest Amul milk and premium ingredients. Among the array of international ice cream flavors are Dulce de leche from Argentina, Butter pecan from the USA, French Caramel, English Apple, Persian Peach, Belgian Chocolate, Swiss Chocolate, Jamaican Toto, Spanish Tango, Italian Fudge, Turkish Coffee, California Slow Churn, and numerous others.

Continue Exploring: Ice cream sales soar in Gujarat as summer cravings kick in early: Anticipated to break records this season

Following the inauguration of the initial Amul Ice Lounge in Pune a year ago, Amul has successfully inaugurated one Ice Lounge every month, with Lucknow being the 12th such establishment in India.

At present, the Amul Ice Lounge can be found in Mumbai, Ahmedabad, the Statue of Unity, Surat, Jaipur, and Anand. This summer, Indian patrons will also have the opportunity to enjoy international ice cream flavors at Mumbai International Airport, Connaught Place in Delhi, and Nashik, bringing the total store count to 15. Furthermore, we have devised plans to launch 100 Amul Ice Lounge International Ice Cream parlors within the current year.

Amul Ice Lounge has been recognized by the prestigious Times Food & Night Life Award 2024 in the category of the Best Ice Cream Lounge – Premium Dining.

Continue Exploring: Amul secures top spot as world’s strongest dairy brand and second strongest food brand globally

Ice cream sales soar in Gujarat as summer cravings kick in early: Anticipated to break records this season

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March 4, 2024

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Although summer hasn’t officially arrived, the craving for a summertime favorite has already taken hold. Ice cream brands are experiencing a surge in sales this month, well before temperatures start to rise. February alone saw a remarkable 15% increase in sales across Gujarat.

Leading ice cream manufacturers in Gujarat anticipate that sales figures from March to June this year will surpass all previous records. This growth is fueled by both in-house and out-of-home consumption, as well as demand from the hotels, restaurants, and catering (HoReCa) segment.

Amul, India’s largest FMCG brand, is investing INR 1,000 crore to bolster its manufacturing capacity by establishing new plants and enhancing its current facilities. This investment serves as a clear indication of the anticipated demand for this summer.

“We have started new plants at six locations including Kutch, Surendranagar, Taloja, Pune, Ujjain and Varanasi, increasing our total ice cream plant locations to 25 from 19 last season,” stated Jayen Mehta, managing director of the Gujarat Co-operative Milk Marketing Federation (GCMMF), the marketing arm of Amul.

Continue Exploring: Havmor unveils new ‘Havefunn’ ice cream parlour in Nadiad, Gujarat, adding sweet bliss to the state’s taste buds

“We are growing at 25-30 % and are expecting that 2024-25 too would be a year of bumper growth as last summer season was disrupted due to unseasonal weather,” said Mehta.

A senior official from another leading ice cream brand said, “Feb sales were encouraging, and the Gujarat market has seen around 12-15% growth during the month compared to Feb 2023. We believe this summer, the market will expand by around 12-15%,” he said.

Industry analysts also note that rural demand has been steadily rising each year, primarily attributed to increased electrification and higher farmer incomes.

“There will be volume growth this year because there is no possibility of retail price increase. Milk prices have increased from last year, but milk powder prices have remained almost stable. Two years ago, the industry saw a significant price hike due to increased cost of packaging and other raw materials,” said Bhupat Bhuva, chairman of Gujarat Ice Cream Association.

Continue Exploring: Walko Food’s NIC raises $20 Million in funding round led by Jungle Ventures

Uttar Pradesh’s dairy sector set for transformation with INR 9,000 Crore investment

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March 4, 2024

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In a significant advancement for Uttar Pradesh’s dairy sector, projects launched during the groundbreaking ceremony are set to attract investments totaling INR 9,000 crore. Despite the state’s accolade as the leading milk producer among states in 2022-23, it continues to grapple with low milk production capacity in cattle, underscoring the considerable scope for enhancing total production.

The projects will also open up employment opportunities within the state, said an official from the department of animal husbandry.

On February 23, Prime Minister Narendra Modi inaugurated the Banas Kashi Complex in Varanasi. This project is expected to create direct employment opportunities for approximately 3,000 individuals and indirectly benefit around 100,000 people, particularly farmers from 1,346 villages in Purvanchal. Additionally, at the close of the year, dairy producers will also receive a portion of the company’s dividends.

Continue Exploring: Dairy tech startup Stellapps in advanced talks for $20 Million Series C funding, eyes expansion and IPO in next 3-4 years

According to Dairy Commissioner Shashi Bhushan Lal Sushil, the Banaskantha District Cooperative Milk Producers’ Union Ltd intends to establish a dairy unit in Baghpat with an investment of INR 800 crore. The facility will initially handle 10 lakh liters of milk per day, with potential to increase to 15 lakh liters per day in the second phase, creating 4,000 job opportunities.

Furthermore, CP Milk and Food Products Private Ltd, presently running three manufacturing units in the state and offering employment to thousands of individuals, has opted to broaden its operations with an extra investment of INR 300 crore in Barabanki. This initiative is anticipated to create job opportunities for 90 individuals. CP Milk directly sources milk from 1.65 lakh dairy farmers.

Smart Grid Pvt Ltd is set to establish its unit in Gonda, with an investment totaling INR 1,100 crore. This venture is expected to create 3,000 job opportunities. Additionally, Rinku Dairy is initiating projects in Bareilly and Shahjahanpur, with investments of INR 490 crore and INR 300 crore respectively. Together, these projects will provide employment for over 1,300 individuals.

“Other major investments include a INR 300 crore project by Bareilly Dairies Ltd, INR 300 crore by Mitra Seva Insurance and Fintech Pvt Ltd, INR 252 crore by Gopal Ji Dairy, INR 250 crore by Creamy Foods in Bulandshahr, INR 250 crore by Pradhan Milk Chilling Plant in Meerut, and INR 212 crore by Dairy Craft in Bareilly,” said the commissioner.

Continue Exploring: Akshayakalpa invests INR 15 Crore to establish state-of-the-art dairy ecosystem in Tamil Nadu

MDH Spices to invest INR 150 Crore in new Ujjain facility, eyes INR 2,000 Crore expansion nationwide

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March 4, 2024

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MDH Spices, a leading spice manufacturer, has announced its intention to establish a new manufacturing facility in Ujjain, with an investment of INR 150 crore. Additionally, the company aims to invest INR 2,000 crore in expanding its operations across India in the forthcoming years.

The company has acquired a 16-acre plot in Ujjain.

The company has already allocated INR 5 crore towards its Indore plant investment.

Continue Exploring: KPG Spices enlists Kareena Kapoor Khan as brand ambassador

Rajeev Gulati, CMD, MDH Spices, said, “We have taken 16 acre in Ujjain and intend to invest almost INR 150 crore in the coming 2 years. This will be our third largest unit after Faridabad and Nagaur in Rajastha. MP happens to be the center of India and this makes procurement and processing of spices easy. Here we will be producing more because logistically well placed and sending it across MP is easy.”

Gulati mentioned that the increasing demand for Indian spices is creating opportunities for export expansion. He further stated that he is considering the establishment of an export-oriented unit in the state.

“Within India also we are improving and innovating. We are bringing in new blends suitable for different markets,” said Gulati.

Continue Exploring: Chukde Spices announces Karisma Kapoor as brand ambassador in exclusive 2-year partnership

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