TATACONSUM — earnings call

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Prepared remarks

“Tata Consumer Products Limited

CONSUMER PRODUCTS LIMITED · MR. AJIT KRISHNAKUMAR – CHIEF OPERATING

MR. AJIT KRISHNAKUMAR – CHIEF OPERATING OFFICER - TATA CONSUMER PRODUCTS LIMITED MS. NIDHI VERMA - HEAD - INVESTOR RELATIONS &

CORPORATE · COMMUNICATIONS

COMMUNICATIONS –

CONSUMER PRODUCTS LIMITED · MR. AJIT KRISHNAKUMAR – CHIEF OPERATING

Tata Consumer Products Limited October 21, 2022

Moderator · Conference Operator

Ladies and gentlemen, good day and welcome to the Tata Consumer Products Limited’s Q2

Questions and answers

Moderator · Conference Operator

Thank you very much.

We will now begin the question-and-answer session.

The first question is from the line of Abneesh Roy from Nuvama.

Please go ahead.

Abneesh Roy

Thanks for the opportunity.

My first question is on the RTE, RTC brand relaunch so want to understand why Tata Q relaunch happened and why have separate brand for the domestic and international, is it a copyright issue.

A related question is RTE, RTC and spices these categories look very good on paper and there are already lot of local and listed players also present in most of these, you are not exactly the early mover in most of this, so what is the plan here in terms of market share capture from a longer-term perspective because there is not too much of differentiation and some of these are tough also, so want to understand from a market share longer-term what is the plan?

Sunil D’Souza: If I take that question, the reason for the relaunch is we went back to the drawing board after we acquired Tata Smart Foods and looked at its consumer outwards.

Basically, we found there were issues or there was consumer feedback on product, there was consumer feedback on branding, there was consumer feedback on packaging.

So if you look at it, we have worked on all the three pieces.

So, I would strongly suggest you should try some of the new products which are there and especially if you tried Tata Q in the past you would see the noticeable difference.

In fact at a recent strategy meet for the Board we only served them products from this range and they could not make out the difference between fresh versus from this set so that is the product quality-a). b) you are absolutely right there is an issue ideally I would have wanted to use Tata Raasa as one brand across, but there is an issue of copyright in India and therefore we had to go two ways but apart from that in India we wanted to give the cover of Tata Sampann to make sure consumers know where it is coming from because we do think Sampann has built decent equity in India which allows us entry into the consumer mind and hopefully kitchen ,that is number two.

But what is going to happen is over a period of time you have to remember there are two distinct channels in the international market - one is the ethnic stores, but more than that now slowly, slowly Tata Consumer Products Limited October 21, 2022 there is the world food aisle which is growing significantly in mainstream grocery across the globe.

Our intent is to be there and therefore two brand names might help us play that game in a significantly differentiated segmented manner.

Lastly we are aware that this is a market which there are multiple players, there are not only players from India who are manufacturing or exporting, there are local players in those markets who are manufacturing who built pretty strong bases but given where we are, number one given the fact that we have teams on the ground, given the fact that we have retailer relationships and I am talking of mainstream grocery which is where the better margin game is, given the fact that we have logistics and sales partners which are very, very strong and of course I do not think we need to market the Tata brand name to too many people.

Will we dominate the category will we get phenomenal shares, no, but given the fact that it is a 1500 Crores market and growing significant double digit we do think it is a nice profitable business which can be scaled.

My second question is on India branded tea.

Last few quarters volume growth here has been elusive for you.

So when I see the construct of the industry almost half of the market is local regional players and whenever commodity deflation happens which has in fact happened in tea last one year if they have come back in terms of advertising and promotion so which means that they would have come back, so the Nielsen market share the issue is almost every listed company says that we have gained market shares but when I correlate that with your lack of volume growth past few quarters and the regional players coming back then it does not tie up.

And second is you mentioned when the industry comes back… what will lead to the industry coming back, I understand the current slowdown, but it is a very well penetrated category also and you have also relaunched Agni in the past two quarter so why the volume growth is not coming back taking everything into account that half of the market is still local players?

Sunil D’Souza: You are absolutely right.

Let me just flip it around.

Instead of saying deflation, in times of inflation is when organized players gain in this market and the good news is you are reading the headlines right now whether it is rupee, whether it is oil, etc., so we do think apart from tea prices everything else is primed for inflation and therefore probably should even out, number one.

Number two, the softness if you look at it is primarily rural and semi urban and even if you look at my portfolio it is my mass premium and premium portfolio is doing well, the stress is at the bottom and this stress is in very specific geographies, so it is not broad based I would say it is more rural, it is more semi urban and it is more Hindi belt sort of softness and which is why I have been keeping an eye on the monsoon and therefore what happens and right now as I see I can start seeing green shoots but I would not declare victory.

I think we have got to watch for some time.

But we do think, so to your point about Nielsen, in the lack of any other data to point you in which direction you are headed I think Nielsen is the only option on the table.

The good news is we are very, very clear you might not get volume and share numbers accurately industry numbers accurately, but you do get Tata Consumer Products Limited October 21, 2022 distribution numbers accurately and I do believe given the fact that we have very, very strong share of handlers, if I am distributed, I will get shares.

So therefore, we are going surgically behind geographies where we have distribution gaps, and you would be amazed that despite the progress that we made in the last two years we have still got enough white space to play let me put it this way across the country, which is what we are focused on which should start giving us volume momentum gains.

One last quick question Starbucks 25 new stores total of 300 that is a very sharp expansion is it because of the bunching up of stores because of the COVID so approvals, etc., those are delayed, what is the run rate we should build in from annual run rate for the next three, four years?

Sunil D’Souza: Last quarter we had not opened as many stores so you are right there is a bit of bunching, I will also leave you with the fact that I have maintained that with Starbucks we have got a strong operating model we know that same store sales continue to grow aggressively like I said we are up by 24% versus the pre-COVID period.

We know that store profitability is good, we know that when we open outlets we do get very, very strong ADTs as well even in terms of going to Tier-2, Tier-3, and there is significant excitement when Starbucks enters a new town.

We are still in limited if I am not mistaken 36 cities and we have still got significant runway to play.

Given the fact that we have a strong operating model, we know there is competition coming in, we know we have got a window of opportunity; we are committed to accelerating stores.

Sure, thanks that is all from my side.

Thank you.

Moderator · Conference Operator

Thank you.

The next question is from the line of Sumant Kumar from Motilal Oswal.

Please go ahead.

Sumant Kumar

My question is regarding our Tata Sampann.

So, assuming all the product portfolio expansion as on date and the kind of growth we have shown 37%, so what kind of volume growth, I am not talking about value growth, what kind of volume growth we can expect from Tata Sampann in a couple of years?

Sunil D’Souza: I do not think we should look at volume growth in Tata Sampann because my volume growth in for example if I take dry fruits and index the pricing to my pulses it is by a factor of multiples, so therefore I do not think for Tata Sampann it is right to look at volume because of the various different categories that we play in.

Spices per kilo versus dry fruits per kilo versus pulses per kilo, it is significantly higher.

Now what we have said is we will grow Tata Sampann CAGR at 30%.

Last quarter we were soft, and we had said that we are not worried because we did renegotiate trading terms and normally when you do that you do see a temporary setback.

We have grown 37%, we are expanding Sampann into new categories, we have gone into Hing for example, we are going into new geographies, and Tata Consumer Products Limited October 21, 2022 we were not in the South in spices in a significant manner we have gone there.

So, 30% CAGR (value) I think you can take it as given.

Okay thank you so much.

Moderator · Conference Operator

Thank you.

The next question is from the line of Percy Panthaki from IIFL.

Please go ahead.

Percy Panthaki

Hi!

Sir, the NPD percentage of 11% that you mentioned how do you define it, is it all launches in the last 24, 36 months what is the definition exactly here?

Sunil D’Souza: Yes, so it is launches over the last three years and you take contribution from revenue over the last three years But just as a perspective, the significance of launches in the last one year is significantly higher than the last three years and definitely much more than the last two years, so it is more recent launches which are coming up rather than cycling numbers of the past.

Like I said that is because we are also accelerating the pace of innovation.

This quarter compared to last quarter we have doubled the number of new products launched.

So, this 11% is revenue contribution number, right?

Sunil D’Souza: Yes, on e-commerce.

11% pertains only to e-commerce and not the overall portfolio?

Sunil D’Souza: That is correct, no, 11% I would give a hand and a leg and everything to get 11% on my total number, but unfortunately no it is not.

Our target is to exit this year at 3.5% to 3.8% of sales total.

At a total portfolio level?

Sunil D’Souza: That is correct.

The benchmark for us is we should be getting to a 5%.

If you remember when we started FY2020 we closed at 0.9%, from there we made significant progress almost doubling every year, so this year the target is to exit at 3.5% plus.

Next question is on margins, this quarter you recorded a margin of about 13% on a consolidated level.

So just wanted to understand what are the pluses and minuses which are likely to occur over the next couple of quarters and do we see a sharp jump from this level in the next quarter itself or it is going to be a very gradual kind of a recovery from this 13%?

Sunil D’Souza: If we were able to predict it, I think we would be in a fantastic position, you have seen what is happening to people who cannot predict right.

For the India market, I would say the Tata Consumer Products Limited October 21, 2022 variables are volume growth coming back into tea, that is number one.

I would not worry about salt traction, I would not worry about Sampann which are the big drivers, I would not worry about RTD, and I would not worry about Starbucks.

Internationally, as I said there are multiple factors in place.

The biggest thing is currency movements because remember tea is bought in US dollars in Kenya, but then there is a actual transaction impact when we sell in the UK so that is one piece.

Canada also rolls up to the UK so that is one piece and the pound to the rupee when I translate it into Indian revenue that is becoming an issue.

US dollar helps me in terms of revenue for the US.

Sum total, inflation in the international markets and therefore impact on the categories and demand, number one.

Number two, currency movements and our ability to make sure that the impact on the P&L is negligible and number three is making sure that we are taking pricing in line with all these movements to make sure we are maintaining margins is the most critical piece.

Now just as a perspective, the one thing I am not worried about at least when I look at the business right now is market share.

It is more industry factors which I am worried about because like I said in the UK now, we have become the number three brand and in the US, we continue to hold and gain shares in K-cups.

So, if my calculations are right the international margins being under pressure this quarter, the larger part of that problem is not the Europe business but the Eight O’Clock Coffee business right.

So, if you can give some idea as to what really happened there why margins there were under pressure?

Sunil D’Souza: No, so actually it is a matter of both.

It was currency inflation softer demand.

UK was primarily softer volume and therefore the relevant pressure on the P&L and a bit of inflation.

The US was more about coffee prices as I said coffee prices have gone up steeply, we do hedge as those hedges come up for renewal we have to hedge at newer rates and some of those costs have hit us.

And therefore, we need to take pricing both in the US and UK we are taking pricing.

US it is already underway, UK it got announced.

But to your point are we out of the woods, probably not.

This quarter is still a choppy quarter in terms of all these moving parts in international, and in India we do need to see demand coming back consistently before we can declare that now it is smooth sailing.

So, I would give it at least a quarter before making a call.

Understood that is all from me.

Thanks, and all the best, Sir.

Moderator · Conference Operator

Thank you.

The next question is from the line of Palak Shah from Infina Finance.

Please go ahead.

Palak Shah

In the last quarter, one of your peers mentioned that the cost of tea consumption which is per cup has actually inched up because the tea prices were high even the milk and the sugar Tata Consumer Products Limited October 21, 2022 prices have inched up, that inflation is continued in the ensuing quarters as well and in fact built up on that.

So, do you foresee the volumes coming back in Q3 and Q4?

Sunil D’Souza: I would not try to go as much as the cost of a whole price of teacup because you remember the alternate beverages are coffee which is again it is milk and sugar.

So, I would be more focused on fundamental tea prices and the value that they have given to the consumer in terms of the tea that they are selling, yes it does translate it into a end cup.

We are seeing stress out there, as I said the stress is very specifically rural, semi-urban, it is very specifically in the lower end of my portfolio, and we do need to see those geographies and that part of the portfolio come back.

As I said, right now the hypothesis is given that it has been a good monsoon yes it has probably been an overtly good monsoon probably at the wrong time overtly good that is what I hear, but that it has been a good monsoon.

The MSPs are good, and this is the first festive season where there are no restrictions we do expect to see some sort of normalcy come back but as I said I would still wait for one quarter to declare that everything is back to normal and growth has come back.

Just one more on the salt side at the input inflation, has it moderated on a sequential basis because we are hearing that the Brine prices are actually inched up because of unseasonal and heavy rainfalls?

Sunil D’Souza: Actually speaking, I think if you look at the distribution of rainfall it is deficit in the areas where it should be deficit which is primarily in the salt basins in Gujarat so hopefully Brine prices will hold, we will know that in a couple of months.

But the problem is the cost of energy which is required to convert brine into salt is the critical piece.

So, two components at work here- one is the cost of coal and other is because it is imported is the foreign exchange and while overall crude prices have moderated and therefore what I am hearing is overall the pressure on demand for coal is starting to moderate.

I think the rupee depreciation does not help, so we are watching that closely.

But I will go back to the fact that we have taken aggressive price increases, made sure that our execution matches up and therefore we have held up share on salt.

Got it.

Those are the two questions from my end.

Thank you.

Sunil D’Souza: Just a point that I would want to make is, for me two important factors in judging the health of any business long term.

One is market share and the second one is margin.

The reason why its market share is I do not control industry, industry can go up and down for example in tea whether it is India or the UK, US or wherever and when industry does come back, we will come back strongly, we are in the staples business we are not discretionary so it will come back.

So, we will come back very strongly, and volume growth will come back.

Margin important because when we come back we are making sure that we are making the same amount of money that we were making when there was pressure mounting.

So these Tata Consumer Products Limited October 21, 2022 are the two factors that I would look at and every single business which I look at, market share and margin seems to be on a good wicket in India.

Internationally market share is on a good wicket, margin is not and that is why we are taking pricing actions to make sure we put them back.

Thanks for the detailed answer and wish you all of you a Happy Diwali and a New Year.

Moderator · Conference Operator

Thank you.

The next question is from the line of Amit Purohit from Elara Capital.

Please go ahead.

Amit Purohit

Thank you for the opportunity.

If you could just share some data points on the rural versus urban growth trends that you indicated in your outlook as well , what you have witnessed in the Q2 and Q1 quarters till now?

Sunil D’Souza: We would be probably the wrong benchmark to look at rural versus urban, because we have consistently maintained that over the last 24 months or so while we have built or rebuilt our distribution system, we are good on the urban side, metros and urban.

Our gaps are in the semi-urban and rural.

We are building out semi-urban and rural and therefore our growth in semi-urban and rural are far healthier than urban.

But that is not the story for the industry.

The catch is we did expect the industry to be on a faster wicket in semi-urban and rural and that is what is slowing us down.

What would be our mix like in terms of semi-urban and rural?

Sunil D’Souza: The mix right now will be roughly, I am just giving you a ballpark number, it will be two third urban, one third rural.

Also wanted to understand your initiatives in the South.

We launched actually a salt brand Shuddh, to ensure that the solar based ,how has been the response from the consumer side and just if you could throw some light on that because we were looking to build that to tag along other categories as well so just if you could give some insights on that?

Sunil D’Souza: You are absolutely right.

Shuddh was a brand which we had launched in the South very specifically if you take the southern markets other than Tamil Nadu, of AP, Karnataka, Telangana and of course to a significant extent Kerala as well.

The consumer is used to solar salt and therefore when we put in vacuum evaporated salt, the answer that we get is this is not my salt from the homemaker or the person who is using the actual salt and therefore we have launched Shuddh by Tata Salt.

We had launched it about I think just about a quarter ago.

We have launched it in the states of Andhra, Telangana and we have had significant learnings out there.

While the product itself scores a win against all competitors bar none, the catch is we have had learnings on the packaging and the cues on the packaging.

We are right now working to do a sort of as we roll it out from this pilot per Tata Consumer Products Limited October 21, 2022 se as we roll it out, we will be modifying the packaging in both the way it looks and the size scale of the packaging, so that it denotes a much more premium image.

In the next probably 30 - 60 days or so we will be rolling it out because we are confident now that we have learned what the consumer reacts to, I think we have got the entire formula in place to make a success out of it.

Lastly if you could share these are uncertain times especially on the international market on the currency.

But pricing actions that you have taken up would help you to at least reach the double-digit EBIT margins, maybe Q4 or so is that a possibility or we would just wait and watch kind of?

Sunil D’Souza: So just as a perspective in the US market if I am not mistaken from about September 2021 onwards, we have taken about a 22% price increase already, and we thought that was good enough for us to negate any commodity/currency action.

Now that is obviously not the case so we are doing one more round of packaging-led pricing if I may put it that way.

In the UK as well, we had taken a 7% price increase which at that point of time looked like it was good enough to get us through.

But obviously not, so we have announced a very, very significant double digit price increase already in the market.

The only issue is that there is a roughly a 90-day notice period to trade there and then of course there are games which the retailers play among themselves before the pricing lands.

So, I would say, you will see that pricing land firmly only in Q4 and the intent is to make sure that both the businesses get back into double digits.

But here is the thing, between now and then your guess is as good as mine as to how inflation plays out, how cost plays out and where the pound goes and where the dollar goes.

The other piece is we have also, given the fact that it is uncertain times we have looked at our entire cost structure in the international piece and we have got a full-fledged roadmap on structural cost restructuring, we have already actioned part of it, there has been already a, you call it in-shoring, off-shoring, outsourcing whatever so we have got in-house offshore back office at Bangalore where we have already started pulling work from the international market.

But there will be a phase two at which we will look at all different other costs in the systems to figure out, how we can make it into a much more leaner machine and to your point delivering significant double digit EBIT growth.

Just one followup does these pricing action puts us any in on a disadvantageous position versus competition or this is generally the trend?

Sunil D’Souza: Everyone buys tea from Kenya, all tea in Kenya is priced in dollars, and all the guys in UK sell it in pounds so I guess all of us are in the same hole.

Fair.

Thank you so much and wish you a Happy Diwali Sir.

Thanks.

Moderator · Conference Operator

Thank you.

The next question is from the line of Mihir Shah from Nomura.

Please go ahead.

Tata Consumer Products Limited October 21, 2022

Mihir Shah

Hi Sir, thank you for taking my question.

Can you talk a bit more about the timelines and any indicative synergy benefits from the simplification exercise that we have called out last year on the international business in Tata Coffee?

So that is my only question.

Sunil D’Souza: Yes, so there were two parts of the simplification- one was the India leg, and one was the international leg, and they are also in a sense interdependent.

On the India leg, we had applied for NCLT to demerge the extractions business and merge it into Tata Consumer and roll in the plantations business into a wholly owned subsidiary of Tata Coffee.

So, both the companies had applied for NCLT.

For Tata Consumer, which is NCLT at Kolkata, we have got the date of November 12th which is NCLT hearing.

We are still awaiting the date from NCLT Bengaluru for Tata Coffee post which I think the whole thing your guess is as good as mine as to when that comes through.

But presuming it comes through in the next 30 days or so I would say give it 90- 120 days to be fully actionable.

So, it is in motion, it is just we are waiting for the requisite approvals.

On the international leg there were two significant pieces, number one was we were swapping shares held by TEO, which is a Tata company from our UK parent holding company into India shares, for which we had requested for approvals we have got them, and we will be actioning that, so we will be removing all minority holdings from our UK holding company through which we will start the simplification process.

The only catch in the international simplification process ,the big piece is the Eight O’Clock Coffee for which we need the Tata Coffee NCLT to go through before actioning it.

But as of now everything is on track, it is just a matter of getting the proper approval so that we can press the triggers.

Ballpark understanding of it being EPS accretive about 3% to 4% would be a fair understanding, Sir?

Sunil D’Souza: Absolutely, the whole objective is that there is a significant amount of cost and dividend and tax optimization that is possible, because of which it will be EPS accretive.

Got it.

Thank you so much.

That is all from my side.

Nidhi Verma

Moderator, we will just go to the webcast now and take a couple of questions from there before returning to this.

Sunil, there is a question from Chanchal, he is asking given the cash position in book and speed to market by acquiring good quality assets any thought on the same and second question is also on pulses sourcing how far are we in that process?

Sunil D’Souza: Let me answer the second question on pulses sourcing.

I think like I said we have rejigged our entire system including injecting new talent and we have seen very, very good movements basis the actions that we have taken, but very early days.

On top of that we are right now building an entire digital engine in our tea procurement business which we will be leveraging for other commodities including pulses.

So we feel good about where we are, it is just that we need to see a few quarters of consistency before we say we are good, so Tata Consumer Products Limited October 21, 2022 that is number one.

Cash position in books and good quality assets, if you have anything in mind do let me know, I am also on the lookout.

The catch is as I have consistently maintained we will not be in a hurry for anything.

We will be very, very focused on making sure the financial metrics and the strategic screens both pass before we get it through.

There are multiple discussions always ongoing at Tata Consumer.

In fact, in the early part of the integration we had beefed up our digital teams, our R&D teams, and our sales teams.

We have of late boosted up our M&A and strategy teams as well.

We look at multiple things at the same time and there are ongoing discussions.

But here I would not put a timeline I would not put a target because we want to make sure we are creating value.

Thanks, Sunil and the next question is from Saurabh, he is asking among the growth categories how do we create synergies in distribution marketing strategies, etc., given that the products are at two different ends of the spectrum.

On one hand we have deeply penetrated categories like pulses, spices, etc., but no brands and on the other hand we have RTE, plant-based meat, NourishCo, Gluco+, etc., where market is at a nascent stage, but very fragmented.

Sunil D’Souza: Let me put it this way, it is not that we will get synergies in everything across all the categories that we play in.

So Ready to Drink is a separate vertical in terms of whether it is manufacturing or it is distribution it is distinctly different from the other categories that we play in and therefore we are building it separately.

It is a completely asset light model because it is co-manufacturers manufacturing at the back end and distributors distributing at the front end.

The value we add is in terms of R&D and products, marketing and strategies and so far, are doing very well, like I said we are right now growing at about 64% I think.

Even calculating for the COVID lockdowns and the time lost for us to scale it up we are still I think north of 50% CAGR, so it is in a very, very good place.

All the other products there is significant amount of synergies because only thing is you have to dissect, for example, whether it is plant-based meat or protein I will not be selling it in every Kirana store and every outlet so there is immense amount of synergy in modern trade and e- commerce, also on D2C so that is where we are focusing.

It is the same team which is handling it and given the fact that it is modern trade and our e-commerce bandwidth is not an issue for the team to deal with.

At the front end when it comes down to product distributed in Kirana stores, there is immense amount of synergy for example whether it is Sampann, RTE also to an extent in what we call SAMT Standalone Modern Trade and Higher End Grocery/Kirana stores.

Given the fact that we are completely digitized on our distribution system, we have the ability to make sure we restrict distribution where we want it and open distribution where we want it so that is the way we play it.

The only thing we have got to be mindful, and we are right now running a few pilots in a few places, as our portfolio expands, we have got to make sure that the salesman does not become a bottleneck with too many products to sell.

So, we are looking at how do we create extra bandwidth there either through geographical segmentation or through portfolio segmentation and Tata Consumer Products Limited October 21, 2022 looking at split out, split geographies, all those kinds of things there are pilots running basis which will take a call because we will grow our portfolio and we will try to leverage synergies, but we have got to make sure that we continue to keep the bandwidth going.

Thanks Sunil and the second question from him is while Sampann has a strong proposition of purity and is associated with not processed pulses, does the launch of RTE products which are essentially processed food can impact the essence of Sampann as a brand?

Sunil D’Souza: Yes, absolutely right so the whole thing is it is Sarvagunn Sampann, and we will preserve the goodness.

Now this is just as a perspective, it is a misnomer that RTE does not contain nutrition and is full of preservatives.

Most of our SKUs do not have in RTE do not have added preservatives, colors or flavors.

They are good sources of protein and fiber and Sampann is the endorser brand, it is not the main brand.

Like I said in India it is Yumside which is the brand ,the reason it is like it is almost from the house of Sampann so to speak which gives us an easier entry into the consumer minds and therefore the kitchens.

Thanks Sunil with that we will just quickly go back to the Q&A queue to see if there are any pending questions.

Moderator · Conference Operator

We will take the next question from the line of Darshil Pandya from Finterest Capital.

Please go ahead.

Darshil Pandya

First, congratulations on the number, you have been doing good.

One of the questions was already answered regarding this Tata Sampann Yumside so even I was a bit skeptical about how things will be because we have seen reviews, but I will definitely try this new product which the Tata has launched.

Second question was on the basis of this Go Fit which the company has introduced so where do you see, you see this penetrating high in the market in the next few quarters or year?

Sunil D’Souza: So, GoFit here is the thing, we have defined protein as a platform which we will focus on.

We did launch Tata Simply Better which is alternate meat, and we will be expanding the portfolio on Tata Simply Better to more products which are probably beyond protein as well.

Simply Better products per se and then we have launched the supplement range we have made our first foray with GoFit.

The idea of GoFit is to I would say I would use a phrase called launch and learn.

We put it out there in the market it is positioned at women which is a white space there is no other product which is positioned at women.

It has got probiotics which helps in easy digestion.

So very, very early days, I would reserve any judgment on where we want to take it, how far it can go, what is the expansion that is possible for some time before we see, because remember this is a completely new category for us.

We are also learning.

Once we have a firm handle then we will see how to play this category.

The reason we have got into it because protein is a big trend globally and will Tata Consumer Products Limited October 21, 2022 become a big trend in India.

While we missed the boat on many other categories, we want to make sure that we do have, not exactly, but a first mover advantage in this category.

The second question is on the exceptional item which we have seen around 147 Crores from the sale of a land.

Can you please give me some more light on that transaction or something because it is quite one of the items where we do not see it more often, so what is it if you can please tell me?

Sunil D’Souza: This is emanating from Tata Coffee this was the disputed land around Hyderabad which has been in dispute, it emanates from transaction with Tata Coffee years back because and that has been under litigation for a long, long time.

The more practical and value generation was from selling the land which they have sold, and they have recognized it, that is about it.

Very last question. do you have any other product pipeline maybe it could be chips premium chips or biscuits or something you are looking at?

Sunil D’Souza: So, we have defined snacks as one of the platforms that we will have in mini meals breakfast and snacking, but I do not think at least and I am shooting off the cuff here, I do not think we are going to get into chips, we are not going to get into bhujia, we are not going to get into the Kurkure equivalent.

We have to figure out our own strategy on snacking to make sure that we are creating a space which is not competitive or where we have a right to win which has got decent margins, we have the ability to scale it, it is a category which is growing fast.

It is work in process we do not have an answer but yes snacking as occasions will continue to grow and therefore, we want to play in it.

I do not think we will be playing in it with the chips or bhujia.

That is all I wanted to ask.

Many congratulations and wishing you and your whole team a very Happy Diwali and I hope you guys keep performing well.

Moderator · Conference Operator

Thank you very much.

As there are no further questions from the participants, I would now like to hand the conference over to Ms. Nidhi for closing comments.

Nidhi Verma

I would just like to thank everyone for taking the time on behalf of the management and wish you all a great festive season ahead and see you all during the next call.

Thank you.

Moderator · Conference Operator

Thank you.

Ladies and gentlemen on behalf of DAM Capital Advisors Limited, that concludes this conference call.

Thank you for joining us.

You may now disconnect your lines.