Tata Consumer Products Ltd’s Expansion Plans in FMCG

Tata Consumer Products Ltd (TCPL) intends to evolve into a comprehensive, Fast-Moving Consumer Goods (FMCG) entity, announcing plans to venture into new product categories. The company has substantially increased its capital expenditure to ₹785 crore for FY 2025, primarily toward establishing a new facility in Vietnam.

During the annual general meeting, Chairman N Chandrasekaran, who also chairs Tata Sons, addressed shareholder inquiries, indicating that Tata Consumer Products will evaluate potential acquisitions to support growth, subject to financial feasibility and strategic alignment with growth prospects.

Chandrasekaran emphasised that Tata Consumer Products Ltd aims to broaden its focus on millet and expand its product offerings in this category. Addressing whether the company will limit itself to beverages and foods or transition into a full-fledged FMCG entity, he confirmed the intention to become comprehensive in FMCG. When queried about specific future segments for expansion, Chandrasekaran acknowledged multiple possibilities currently under consideration.

Regarding potential acquisitions, he noted the company’s ongoing interest in such opportunities, particularly in health-oriented and food products, while remaining open to exploring other sectors as well.

He further stated that acquisitions will remain a priority as long as they are financially viable and promise growth. In the previous fiscal year, TCPL invested close to ₹7,000 crore in acquiring two companies, namely Capital Foods and Organic India. He said that the company plans to double its capex in the current financial year.

He said, “Last year’s capex was around ₹308 crore, but it is going to be significantly higher, almost more than double of that ₹785 crore, because of a big investment we are making in Vietnam in a new plant. It’s about ₹400 crore, so there will be a big investment in capex this year.”

Speaking of the investments in the digital space, the Chairman stated that the company is making substantial commitments and has made notable strides in this area in recent years. The company plans to enhance its sales and distribution channels while concurrently prioritising investments in digital initiatives.

He stated, “Digital will also bring productivity in operations and also will give better experience to employees and customers. We will deploy many artificial intelligence tools. We are constantly upgrading the company’s infrastructure and tools to make sure that we are staying ahead of the curve.”

He further added, “A large number of new products are constantly being introduced, and this product portfolio will continue to expand.”

On June 14, 2024, the share price of Tata Consumer Products Ltd opened at ₹1,114.60, touching the day’s high at ₹1,124.95, as of 11:16 AM on the NSE.

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