Tata Tea’s Volume Growth Potential Is At Par With Consumer Staples: ICICI Securities
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ICICI Securities Report
Considering organized tea market compound annual growth rate (volume) of approximately 6.5% and ~200 basis points market share gain by Tata Consumer Products Ltd. over FY06-20, the company’s volume CAGR over FY06-20 was ~7-8%, comparable to median volume growth of other consumer staple companies/categories.
The company is likely to deliver volume growth in high single digits in medium-term due to
1. likely market share gains,
2. benefit of regionalization strategy and launch of differentiated variants,
3. possibility of imminent consolidation in industry as smaller players have weak financials,
4. portfolio approach to tackle inflationary periods and
5. volume growth contribution from salt and Sampann over FY21-25.
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