Coca-Cola India’s FY23 consolidated profit soars to INR 722.4 Crore with a 57% increase; ad expenses surge by 52%

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November 2, 2023

Coca-Cola India, a prominent player in the beverage industry, experienced a remarkable 57.15% increase in consolidated profits, reaching INR 722.44 crore during the fiscal year 2022-23. This significant growth was accompanied by a substantial 45% surge in revenue from operations, totaling INR 4,521.31 crore, as per financial data sourced from the business intelligence platform, Tofler. Notably, the company’s expenses for advertising and sales promotion also exhibited a robust rise, climbing by 52.05% to INR 1,122.11 crore during the financial year ending on March 31, 2023, compared to INR 737.97 crore in the preceding year.

The major cola company recorded a profit of INR 459.69 crore for the financial year ending on March 31, 2022, with its revenue from operations standing at INR 3,121.29 crore during that period.

Its supplementary income also witnessed a 23% increase, reaching INR 87.19 crore for the fiscal year concluding on March 31, 2023.

Coca-Cola India’s overall expenditures surged by 42.09% to INR 3,620.92 crore in FY23, compared to INR 2,548.19 crore in FY22.

On a consolidated basis, Coca-Cola India’s total earnings amounted to INR 4,608.51 crore in FY23, reflecting a robust increase of 44.36%. In the previous fiscal year, the total income stood at INR 3,192.17 crore.

The company, which boasts a portfolio of prominent brands in the Indian market, including Coca-Cola, Thums Up, Limca, Sprite, Maaza, and Minute Maid, is under the ownership of The Coca-Cola Company, a major U.S. beverages corporation headquartered in Atlanta.

When contacted, the company said, “This was driven by both volume growth and price-mix, and an overall increase in sales, primarily backed by affordable price points and demand across rural regions.”

The company strategically prioritized expanding its presence within the general trade channel, placing a significant emphasis on reaching out to rural markets.

“Our products are now available Now available in 4.5 million outlets up from 2.8 million outlets pre covid times,” the company stated.

The company maintains its commitment to connecting consumer passions with consumption occasions in order to foster stronger brand connections. This is achieved through digital storytelling and consumer engagement initiatives such as Sprite Joke in Bottle and Thums Up Stump Cam, among others.

“The Company increased advertising and marketing spending to ensure strong demand in the festive season and drive greater consumer engagement. The company has been driving the most significant marketing transformation in our history, focusing on digital-first engagement with consumers,” it said.

During the earnings call for the September quarter, The Coca-Cola Company’s CEO, James Quincy, announced that the company had achieved double-digit volume and top-line growth in India. This impressive performance has translated into value share gains over the past three years.

India is the fifth largest market for the Coca-Cola Company.

Besides, Coca-Cola also has a bottling unit – Hindustan Coca-Cola Beverages (HCCB) Private Ltd, which operates 16 plants.

FMCG sector shows positive shift: Kantar reports 7.2% year-on-year growth in Q3, rural markets gain momentum

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November 2, 2023

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According to Kantar, a prominent global research firm, there are signs of a positive shift in the fast-moving consumer goods (FMCG) sector. This comes as the demand for everyday groceries and essential items recorded a 7.2% year-on-year growth during the September quarter.

Data from the research firm indicates that sales volume increased by 6.2% in rural markets and 8.4% in urban areas compared to the previous year.

Marico, the manufacturer of Parachute and Saffola oils, reported a promising beginning to the second quarter, observing rising demand patterns in both rural and urban regions in July. However, the company noted a significant decline in overall sentiment, particularly in rural areas, during August and early September.

This was prompted by inadequate rainfall, coupled with a surge in food prices.

“We have seen some recovery since the second half of September and we are optimistic about a gradual pick-up in consumption, with the onset of festive season, range-bound retail and food inflation, and government spending between now and the elections,” Marico managing director Saugata Gupta told investors on an earnings call recently.

Kantar keeps tabs on both branded and unorganized products, which even includes bulk, unpackaged commodities. In contrast, Nielsen primarily focuses on monitoring retail sales, with a strong emphasis on the branded category.

Furthermore, Kantar’s data comes with a one-quarter delay, as it examines real household consumption by volume and the primary sales made by companies to their distributors.

The expansion in the consumer goods segment was aided by the comparatively low figures from the previous year and increased consumption of high-volume product categories, particularly food items like atta. Surprisingly, last quarter’s growth was even higher, despite all the festive days this year falling within the December quarter. This differs from last year when some occurred between July and September.

“With each passing quarter, the gap between urban and rural is diminishing. So, it wouldn’t be a surprise if, by the end of the year, both the regions are at par,” said K Ramakrishnan, managing director, South Asia, Worldpanel division, Kantar. “It appears we are at the beginning of a turnaround for the sector that has been under some stress for the past few quarters.”

He mentioned that atta, a frequently purchased high-volume category, can exert a substantial influence on the FMCG sector, particularly in light of the government’s provision of free foodgrains, which can impact overall data.

Although all segments showed growth, the food and beverages category spearheaded the quarterly expansion at 8.7%, primarily driven by the demand for snacking and convenience products. When excluding atta, the overall market still saw substantial growth, with an increase of 4.2%.

Tata Consumer said sales were better during the quarter than a year ago despite the rural market stress. “We have seen an effect of inflation and erratic monsoons; we have seen an uptick on MGNREGA (the rural jobs programme),” said Sunil D’Souza, managing director at Tata Consumer. “But, that said, we have seen a jump in two-wheeler sales of late. So, we remain cautiously optimistic out there. We have guided for a mid-single digit volume growth, and we are more or less inching towards that, coming towards (it) faster… than the previous phase.”

Referring to NielsenIQ data, HUL reported that the FMCG market volume increased by 8% in the September quarter. Urban areas witnessed a 10% growth in volume, while rural areas experienced a 7% growth.

Sante Spa Cuisine unveils new wellness dining destination in Mumbai’s BKC

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November 2, 2023

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Pune-based Sante Spa Cuisine has extended its reach by inaugurating a 1800-square-foot establishment in the prestigious BKC district of Mumbai.

This concept aims to advocate their fundamental principles, including vegetarianism, veganism, environmentalism, mindfulness, and minimalism, to the younger generation.

The brainchild of Sonal Barmecha and under the guidance of chef Shailendra Kekade, the BKC outlet offers an enticing array of both local and international wines and sangrias, perfectly complementing a diverse menu. This includes a wide selection of starters like southern-spiced cottage cheese, dim sums, and pizzas such as the Burrata Pizza, the Green Pizza, and the Tempeh Slider. The menu also boasts enticing entrées such as Organic Bajra Riso, the Grilled Cheese Steak, and an extensive variety of homemade pastas, among other tantalizing options.

The spa cuisine menu offers a wide range of freshly prepared options, including salads, nourishing smoothies, cold-pressed juices, and a diverse selection of starters and entrees. The juices are predominantly detoxifying and packed with chlorophyll and matcha for energy and refreshment. The appetizers, which range from ragi-based pizzas to a variety of well-balanced main courses, provide choices for vegan, gluten-free, amino-rich, protein-rich, and high-fiber preferences.

For beverages, the restaurant features various shakes crafted with soya, almond, coconut, and fresh A2 milk. Indulge in guilt-free desserts sweetened naturally with ingredients like organic honey, jaggery, and stevia. The meticulously curated menu caters to all age groups, from infants to senior citizens, ensuring a diverse culinary experience.

Notably, Santé incorporates neem wood crockery and cutlery, known for its antibacterial properties, enhancing the hygiene of the dining experience.

Barmecha said, “We embarked on our journey with Sante over eight years ago, with a vision to introduce wellness and nutritious food that not only nourishes but delights the palate. We are thrilled by the enthusiastic reception of our brand and are committed to leading the way in promoting holistic well-being and exceptional dining experiences worldwide. Our dedication to continuous innovation and improvement in the Sante experience is aimed at ensuring our patrons find it enjoyable. Furthermore, we aim to debunk the misconception that healthy food can’t be delicious and appealing, evident through the range of carefully crafted dishes and desserts. We are optimistic about the reception of this establishment.”

Godrej Consumer Products achieves strong Q2 growth with 6% revenue increase and INR 433 Crore net profit surge

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November 2, 2023

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FMCG giant Godrej Consumer Products announced a consolidated revenue of INR 3,601 crore for the quarter ending on September 30, 2023, as compared to INR 3,391 crore during the same period last year.

As per the BSE filing, the company’s net profit surged by 20.59 percent to reach INR 433 crore for the September quarter. In comparison, a year prior, Godrej Consumer recorded a net profit of INR 359 crore.

In the second quarter, the FMCG giant experienced a 10 percent increase in volume, with its India business alone achieving an impressive 11 percent growth in volume.

In its investor presentation, Godrej Consumer emphasized significant margin expansion in critical markets. The company’s overall EBITDA margin for the quarter surged by 19.7 percent, with India taking the lead in margin growth, followed by Indonesia, Africa, the USA, the Middle East, Latin America, and SAARC.

Breaking it down by category, the India business generated INR 1,003 crore in sales in the personal care segment and INR 913 crore in the home care segment.

Within the home care category, the air freshener segment achieved double-digit growth, but the household insecticides category was adversely affected by unfavorable monsoon conditions.

Likewise, in the personal care sector, the personal wash segment demonstrated consistent performance with modest single-digit volume growth, while the growth in the hair color category was affected by an extra month of ‘Shravan’ during the quarter.

During the September quarter, the recently acquired Raymond Consumer Care brands, namely Park Avenue and KamaSutra, generated sales of INR 142 crore. The retailer mentioned that following the acquisition, most integrations have been finalized, and anticipates that cost synergies will begin to materialize from the second half of this fiscal year.

The investor presentation emphasized that GCPL is making progress toward achieving its full-year goals with the acquired brands and anticipates a positive EBITDA, even as it increases its investments in media.

Onion prices expected to remain high for at least a month despite export duty removal

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November 2, 2023

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Onion prices are anticipated to stay elevated for a minimum of one month owing to limited supplies, with exports projected to remain strong due to the elimination of the 40% export duty, which has increased the profitability of overseas shipments amid robust global demand.

On Saturday, the central government eliminated the export duty and simultaneously implemented a minimum export price (MEP) in order to discourage the export of onions.

On October 28, the Ministry of Commerce and Industry issued a notification, setting a minimum export price (MEP) of $800 per tonne on onion exports until December 31. Simultaneously, on the same day, the Ministry of Finance issued a notification declaring that the customs duty on onion exports was reduced to ‘nil’ in the interest of the public. The export duty, initially imposed on August 19, was in effect until December 31.

Reports of exporters engaging in under-invoicing to evade export duties had sustained strong export activity. In response to this situation, the government introduced the Minimum Export Price (MEP), a measure that had been advocated for by a portion of the trading community.

Nevertheless, at present, the very group of traders has approached the government to highlight the adverse effects of lifting the export duty on the domestic onion market.

The Centre introduced a minimum export price (MEP) of $800 per tonne on onion exports on October 28. This decision was made in response to a rapid 60% increase in wholesale prices over a two-week period. The primary goal behind implementing the MEP was to limit onion exports, which had remained robust despite the government’s imposition of a 40% export duty in August. According to various trade sources, the duty failed to discourage onion exports because many traders resorted to under-invoicing to reduce the duty paid. For example, shipments to Bangladesh were recorded at $200 per tonne despite prevailing market prices being over $750 per tonne.

Certain exporters, contending with unfair competition from deceitful traders engaged in under-invoicing, continuously urged the government to implement the MEP.

On October 28, the government yielded to the pressure and introduced an MEP of $800 per tonne. Paradoxically, it appears that even this MEP is unlikely to serve as an effective export deterrent. Why? Because the government rendered onion exports duty-free by revoking the 40% export duty imposed just two months ago.

“Now the exports can continue freely. As one does not have to pay a duty, traders would not have any problem in showing a higher price,” said a trader, who requested not to be identified. And if domestic prices remain lower than INR 65/kg, then the unscrupulous’ exporters can resort to over-invoicing.

Onion exports are expected to maintain stability or experience a slight decrease in the short term over the next 2-3 weeks. This is due to the diminishing supply of high-quality onions from existing stocks and an increased availability of onions from Afghanistan and Pakistan in the international market, which will limit export volumes for the upcoming 2-3 weeks.

Nonetheless, a significant surge in exports is anticipated as new onions from the Kharif harvest become available in the markets following Diwali. Without the presence of export duties, there won’t be any policy hindrance to export activities.

Despite a 5% to 6% reversal in wholesale prices following the introduction of the MEP, market participants do not anticipate a significant price decrease. Since several wholesale markets in Maharashtra, particularly those in the Nashik district, will be closed for Diwali, a slight price increase is expected after markets reopen following the holiday. The subsequent direction of domestic prices will be contingent on the arrival of the new crop and the volume of exports in November and December.

ISWAI predicts surge in India’s alcoholic beverage industry, expects $64 Billion value by 2027

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November 2, 2023

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The Indian alcoholic beverage sector is projected to achieve a market value of $64 billion in the coming five years. This growth is attributed to factors such as increasing incomes, urbanization, enhanced accessibility, a shift towards premium offerings, and a growing younger consumer base, as stated in a report by the International Spirits and Wines Association of India (ISWAI).

The alcoholic beverage industry presently constitutes 2% of India’s nominal GDP and provides employment to more than 8 million individuals in associated fields like agriculture, food and beverage, retail, and hospitality. The report also highlights that in addition to substantial tax contributions, the sector plays a crucial role in sustaining the livelihoods of farmers.

According to the report, India’s changing demographics, the rise of a burgeoning young middle class, and positive governmental policies could create a more favorable environment for businesses in this sector. The report urged the government to eliminate entry barriers to further facilitate growth.

In 2021, the alcoholic beverage industry, with a market value of $52.4 billion, is projected to reach $64 billion within the next five years, maintaining an annual growth rate of 6.54% between 2023 and 2027. According to the report, India is expected to become the fifth-largest contributor to global market revenues in the near to medium-term and currently represents 2% of the country’s nominal GDP.

Additionally, the ISWAI emphasized that the liquor industry provides employment to more than 8 million individuals, both directly and indirectly, constituting 1.5% of the total workforce in the nation. The majority of these employment opportunities are concentrated in interconnected fields like agriculture, food and beverages, retail, and hospitality.

During the fiscal year 2021, the alcoholic beverage sector contributed INR 2.4 lakh crore in indirect taxes to state governments, with customs duties on alcoholic beverages alone amounting to INR 2,400 crore.

The industry accounts for 24.6% of the total tax revenues generated by state governments.

According to the ISWAI report, approximately 14-19% of the total revenues of the organized food and beverage sector rely on the sales of alcoholic beverages.

Nita Kapoor, chief executive of the ISWAI, said, “The alcohol industry holds a vital position within the national economy, presenting opportunities for growth, job creation, and revenue generation. As we look to the future, the importance of the alcohol industry in India is poised to expand. Therefore, it is crucial to simplify its operational complexities, enhance its Ease of Doing Business (EODB), and unlock its full potential for growth.”

ISWAI’s membership comprises leading companies such as Bacardi, Pernod Ricard, Beam Suntory, Campari, Diageo-United Spirits, and Moet Hennessy.

Britannia Industries reports impressive Q2 2024 earnings with 19.6% net profit surge

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November 2, 2023

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Britannia Industries Ltd. saw a boost in its second-quarter earnings for fiscal 2024, surpassing the expectations of financial analysts.

According to an exchange filing on Wednesday, the manufacturer of Marie Gold biscuits reported a 19.6% rise in its consolidated net profit for the July-September quarter, reaching INR 586.5 crore. This exceeded the analysts’ consensus estimate of INR 547.9 crore, as reported by Bloomberg.

The company’s revenue increased by 1.2% to INR 4,432.9 crore, falling short of the estimated INR 4,555.4 crore. However, the operating profit surged by 22.6% to INR 872.4 crore, surpassing the estimated INR 803.4 crore. This resulted in a margin of 19.7%, well above the expected 16.3%, as analysts had previously predicted it to be at 17.6%.

“We delivered a good performance in a challenging environment on the back of two years of high inflation,” Varun Berry, the company’s vice-chairman and managing director, said in a statement.

With the softening of commodity prices this quarter, the biscuit manufacturer implemented price reductions in certain prominent brands to maintain a competitive edge in the face of intense local competition. As a consequence, this move has had a partial impact on the growth of quarterly revenue.

With the ongoing geopolitical unrest in the Middle East and Russia, the global commodity prices remain in a state of persistent volatility.

“We are being watchful of the situation and its impact on our business. Our strategy will remain focused on driving market share while sustaining profitability,” he said.

“Our potential in rural (segment) continues to remain high and hence, expansion in rural distribution continued despite reported rural slowdown,” said Berry.

In the quarter, Britannia Industries initiated operations at its new greenfield facility in Bihar, further expanding its presence alongside recent expansions in Uttar Pradesh and Tamil Nadu.

“With capacity and capability enhancements planned in Ranjangaon Food Park, we are well poised to further extract productivity and enhance competitiveness in these growing markets,” Berry said.

Britannia Industries’ shares concluded Wednesday’s trading session with a 0.92% decrease, while the benchmark Nifty 50 experienced a 0.47% decline. The company’s results were announced after the market closed.

BlueStone achieves remarkable 67% growth in operating revenue for FY23, eyes INR 3,600 Cr valuation in upcoming funding round

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November 2, 2023

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BlueStone (Representative Image)

BlueStone, the omnichannel jewelry brand, saw a significant surge in its operating revenue, marking a growth of over 1.6 times in the fiscal year ending on March 31, 2023. This Bengaluru-based startup reported an operating revenue of INR 770.7 crore in the financial year 2022-23 (FY23), signifying a notable 67% increase from INR 461.3 crore in the preceding fiscal year.

Founded in 2011 by Gaurav Singh Kushwaha and Vidya Nataraj, BlueStone is an omnichannel jewelry startup offering more than 8,000 designs across various categories such as rings, pendants, and earrings. Last year, the startup promoted its chief operating officer, Sudeep Nagar, to the position of co-founder.

BlueStone generates revenue by selling its jewelry through online sales and retail outlets. The brand operates its own retail stores in addition to franchise-operated stores.

The startup experienced a drastic 86% decrease in its loss, dropping to INR 167.2 Cr from INR 1,268.4 Cr in FY22. It’s important to note that in FY22, BlueStone faced a one-time non-operating expense of INR 1,209 Cr due to a change in fair value of shares from the adoption of a new accounting policy. This cost was absent in FY23. Excluding the one-time expense from FY22, BlueStone’s net loss increased by 183% in FY23, rising from INR 59 Cr in FY22.

In FY23, the jewelry startup saw a 45% reduction in total expenses, which decreased to INR 955.1 Cr from INR 1,739 Cr in FY22. Once more, this decline was primarily due to the exclusion of the one-time non-operating expense in the current year.

In the fiscal year 2022-23, BlueStone allocated INR 717.6 Cr toward the purchase of raw materials, demonstrating an 89% surge from the INR 380.5 Cr spent in the preceding fiscal period, showcasing increased material demand.

The startup spent INR 91.1 Cr on employee costs in FY23, a jump of 118% from INR 41.7 Cr in FY22. According to LinkedIn, the startup currently has an employee count of 1,110.

The jewelry brand’s expenditure on advertising and marketing nearly doubled, reaching INR 84.1 Cr in the fiscal year being examined, as compared to INR 42.3 Cr in FY22.

To date, BlueStone has secured more than $100 million in funding and boasts notable supporters such as Ratan Tata, Hero Enterprises, Accel Partners, IIFL Finance, and Kalaari Capital. In the previous year, the startup received a $30 million investment from Hero Enterprise’s Sunil Kant Munjal, valuing the company at approximately $400 million.

According to a report by ET, BlueStone is in advanced talks to secure approximately $65 million in new funding from Nikhil Kamath’s office, Deepinder Goyal, Amit Jain, Ranjan Pai, and others. This proposed valuation stands at around INR 3,600 Cr, translating to 4.6 times its operating revenue in FY23.

In the startup landscape, BlueStone rivals companies such as CaratLane, Melorra, and GIVA. Notably, Tata acquired the remaining 27% stake in Caratlane for INR 4,621 Cr in August this year. Meanwhile, GIVA secured $33 million in its Series B funding round, which was spearheaded by Premji Invest in July.

Mamaearth’s IPO sees surge in subscriptions, reaches 0.7X on day 2

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November 2, 2023

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On the second day of Mamaearth’s initial public offering (IPO), the direct-to-consumer (D2C) unicorn saw an increased interest from investors as its public issue garnered a subscription of 0.7 times. The offering received bids for 2.01 crore shares, surpassing the 2.88 crore shares available for subscription.

On the first day, the subscription rate for the issue was a modest 0.13 times.

Qualified institutional buyers (QIBs) exhibited substantial interest in the issue, surpassing their reserved quota by 1.02 times on the second day. Bids for 1.61 crore shares were placed against the 1.57 crore shares available for this category, with Mamaearth allocating the largest number of shares for QIBs.

Concurrently, the segment designated for retail investors experienced a subscription rate of 0.62 times, as it received bids for 32.34 lakh shares in comparison to the 52.48 lakh shares that were available for subscription.

The employee allocation remained at the forefront, surpassing expectations with an oversubscription rate of 3.19 times. It garnered bids for 1.08 lakh shares, significantly exceeding the 34,013 shares that were made available for subscription.

Non-institutional investors (NIIs) submitted bids for 6.89 lakh shares against the reserved 78.72 lakh shares designated for them. This category experienced the lowest subscription rate at 0.09 times.

The public offering is scheduled to conclude on November 2nd.

Mamaearth has established a price range of INR 308 to INR 324 for its public offering. The beauty and personal care brand aims to generate a maximum of INR 1,700 crore in funds from the IPO, valuing the company at $1.2 billion.

Mamaearth’s public offering includes a fresh share issue amounting to INR 365 crore and an offer for sale (OFS) component of 4.12 crore shares.

Earlier, Mamaearth garnered INR 765.2 crore from anchor investors by allocating 2.36 crore shares.

Established in 2016 by the husband-wife team of Varun and Ghazal Alagh, Honasa Consumer, the company behind Mamaearth, offers a diverse array of beauty and personal care products through brands like Mamaearth, The Derma Co., Ayuga, Aqualogica, and Dr. Sheth’s. Additionally, it owns and operates a network of salons known as BBlunt, which it acquired in the early part of last year.

Mumbai’s Royal China marks 20 years of redefining Cantonese experience in India

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November 2, 2023

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As Mumbai’s renowned Royal China celebrates its 20th year, founders Neville and Michelle Vazifdar have skillfully combined the essence of Asian fine dining with a steadfast dedication to culinary excellence.

Starting with the aspiration of popularizing Cantonese cuisine, this culinary endeavor has thrived, extending its presence to Bandra, Pune, Delhi, and Kolkata.

Their unwavering commitment to crafting a tranquil and contemporary dining ambiance defined by its minimalist decor has played a pivotal role in shaping the Royal China experience. As they mark this noteworthy milestone, their fervor for introducing the delights of Cantonese cuisine to India persists, laying the foundation for an even more thrilling culinary journey in the days ahead.

Neville said, “I remember the day I started Royal China 20 years ago, upon my return from London – with a commitment to serving the best Cantonese food in Mumbai and I am proud of how far we have come. I give the credit to the team who over the years has provided us with unflinching support and loyalty and that reflects in our service and food and is a reason for people to keep coming back to us.”

Michelle, the driving marketing force behind Royal China, added, “Reaching this remarkable milestone of 20 years with Royal China fills me with pride, excitement and anticipation for what the future holds. It’s a journey that has been nothing short of extraordinary and only motivates us to keep going and create more memorable dining experiences for our wonderful patrons.”

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