Ladies and gentlemen, good day and welcome to Tata Consumer Products Q4 FY 2026 earnings conference call. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Ms. Nidhi Verma, Head of Investor Relations and Corporate Communications. Thank you, and over to you.
Thank you, and welcome everyone to the Q4 FY 2026 conference call for Tata Consumer Products. We announced our results for the quarter and year a while ago, and we also shared the materials. Hope you've had some time to go through those. In the call today, I'm joined by Mr. Sunil D'Souza, Managing Director and CEO, Mr. Ashish Goenka, Group CFO, and Mr. Ajit Krishnakumar, Executive Director and COO. In terms of the format, the way we usually do, we spend about 15, 20 minutes walking you through the key highlights of the performance, and then we'll open the floor for Q&A. I just want to draw your attention to the disclaimer statement that is on the screen. With that, I hand it over to Sunil.
Thanks, Nidhi. In summary, our consolidated revenue for the quarter grew 18%, with the India business delivering 16% UVG. For the full year, we've crossed INR 20,000 crore. Revenue grew 15% with India business UVG of 13%. India tea volumes grew 4%. Revenue was -1%, primarily because we've taken price cuts as we've seen tea costs go down. Just as a rider, margin has come back to where it should be as a result of this. For the full year, revenue for tea was up 6%. Salt delivered 12% revenue growth, with a stellar volume growth as well. Overall, for the full year, top line was up 14%. Growth businesses crossed the INR 4,000 crore mark, growing 24% in this year. For the quarter, growth has come back to where it should be with 33%.
Sampann grew 69% in Q4 and 46 full year. RTD continued its strong performance, 28% volume, 23% revenue, in Q4, and overall was 10% for the year. Capital Foods and Organic India grew 8%, while the domestic business grew 15%, because of the Middle Eastern issues, shipping got disrupted for the month of March, including for the U.S., et cetera, where we transship via Dubai and, therefore, we had a hit on the international business. For the full year, combined revenue was up 12%. International maintained a small, strong trajectory. It's actually now competing for growth numbers with India. It delivered 11% constant currency growth in Q4, led by the U.S. coffee business. Full year was 9%. Non-branded was up by 41% in Q4, and for full year by 23%, with healthy profitability.
Profitability in the non-branded, which was elevated last year due to pricing, is now back to normal. Consolidated EBITDA grew 27%, top line 18%, EBITDA 27%, therefore, margin expanded 100 basis points to 14.6%. For the full year, because of the softness in the first two quarters, EBITDA margin for the full year was 13.9%. Working capital was down now to 21 from 26 days last year, and India was -2 versus -1 last year. Innovation to sales ratio came in at a 4.5% with 80 new product launches during the year. The board recommended a dividend of INR 10 per share, which is a substantial increase on where it was last year. For the quarter, India beverages INR 1,600, growing 4%, India foods up 21%, international up 21%, non-branded up 43%.
Overall, INR 5,400 crores, at 18% growth. For the full year, India beverages up 8%, India foods 18%, international up 16%, and non-branded up 25%. Overall, a 15% growth. Constant currency, 13%. I will not repeat the numbers bar to say that while EBITDA grew 27%, PBT was up 32%. Group net profit was before break before exceptionals was 48%, and group net profit grew 22%, and we're now sitting with roughly INR 3,000 crores of net cash. Sorry, yes, if you go back, there is one more metric that we are publishing starting this quarter, is adjusted EPS, and that's the reason is because we also amortize some of the brands that we've acquired. As the amortization winds down, we will have an expansion on EPS.
We will continue to show adjusted EPS also as a factor. For the full year, 15% top line, 12% EBITDA growth, 23% PBT, 24% group net profit before exceptionals, 20% after, and EPS, adjusted EPS of 17.3%, reported EPS of 15.6%. Our A&P to sales was slightly soft this quarter because we spent a significant amount in Q2 and Q3. We normalized it a bit, but as I said, directionally, we will be the 7.5%-8.5% ratio as we go forward. Salt market share was up by 100 basis points. Tea market share was down 50%, but just to reiterate, Nielsen doesn't capture quick comm and e-comm, which is now 21% of our portfolio.
Modern trade, half of modern trade doesn't report their numbers, and they extrapolate. And if you triangulate between home panel, the Kantar home panel, reported numbers by competition and the Nielsen numbers, you would figure that these numbers are a bit off. Going forward, we will probably stop reporting this because we use them now only for execution and not for actual benchmarking. I talked about growth businesses, contributed 31% of our business, India business in FY 2026. For the quarter grew 33%, contributing 33%. We have finished our entire rollout of our new go-to-market system. In geographies where salt is very strong, we've got salt distributor and everything else.
There are 64 cities where our salt and tea combined business is overwhelming, that's we call it core, the rest is clubbed under the growth distributor. In about 17 cities, we were common distributors, we've changed the frequency and or the number of salesmen who go to the outlet. As a result of this, we've already started to see execution metrics, especially lines per outlet, go up significantly, we do expect that to start to roll into actual revenue numbers. We have continued to focus on channels of the future. Modern trade was up 20%, contributing to 15% of India business. e-comm plus quick comm was up 62%, contributing to 19%. We incubated three channels during this year.
Food services exited at an ARR of INR 170 crore, present in roughly 60 cities. Vending exited at an ARR of INR 100 crore, and we have now about 8,000 + machines. Pharmacy exited at an ARR of INR 30 crore. We cover about 42,000 outlets nationally now. Innovation to sales, we continue to ramp up. It's now 4.5% of our sales. We've grown innovation revenue 7x from where we started. We launched 80 new products this year, roughly doubling the number from last year. Our innovation was all focused on the three pillars that we have defined: health and wellness, convenience, and premiumization. We also made strides on sustainability. We are featured in the S&P Global Sustainability Yearbook for the second consecutive year.
We have ranked among top three companies among India 60 most sustainable companies by BW Businessworld for second year in a row. Since formation, we've grown top line at a 16% CAGR for India, 7% for international, consolidated at 13%. EBITDA has grown ahead at 14%. Group net profit has grown still ahead at a 22%. We've driven shareholder returns. Net working capital in India is -2. Total working capital, the point to note is our working capital in India is less than while we've more than doubled the business, it is less than when we started off six years back. Adjusted EPS more than 3.5 x. Free cash flow to EBITDA was 107%, and we've consistently improved our dividends.
In terms of the macros, tea prices largely benign. Right now trending about 5% ahead of where they were the same period last year. But barring any unforeseen climate change, we should have largely benign tea costs. Coffee prices coming down. Right now as we speak, it is $2.99 is what Arabica is trading at, which means, in the next probably two months or so, you'll start to see coffee margins climb up in the U.S. I talked about 4% volume, - 1% of revenue for India packaged beverages. Coffee also grew 20% in Q4, and overall for the full year, 43%. India foods, volume was up 15, primarily driven by salt, but net revenue was also up 21%.
Salt on already a high market share, we continued to improve market share from there. Sampann grew 69% with broad-based contribution across categories. Dry fruits and cold-pressed oils, which we've launched about two years back, as of now are close to hitting a INR 500 crore each ARR. RTD, we've grown 28% on volume, 23% on revenue and INR 260 crores total. Tata Copper+ continues to go from strength to strength, up by 33% in Q4 and 26% for the full year. Capital Foods and Organic India. Organic India INR 135 crores, Capital Foods INR 213. Combined gross margin, as we said, roughly around 45%-50% above our base, which is at 47%. Domestic business in Q4 grew 15%, 13% overall in FY 2026.
Exports declined primarily because of the hit in Q4, very specifically the month of March. Non-branded business revenue was up 41%, soluble revenue was up 43%. Starbucks, good part is now this is the third successive quarter of positive same-store sales growth. Same-store sales growth of 5%, and total Starbucks growth of 7%. We opened 23 net stores, 502 total stores, and now we are present in 80 cities. U.K. revenue growth of 3%. There's volume growth of 4%. Market share continues to retain at a 19%, and value market share in fruit and herbal continues to inch up. U.S., very strong revenue growth driven by price. Volume was a bit soft. Market share continues to improve. Bags is 4.3%, and we continue to gain share on K-Cups as well.
Canada, we had volume growth in Q4 and revenue growth of +7%. A big part was focus is to grow. We've already got close to a 45%-50% share in black. Focus is to gain specialty. If you observe, specialty grew faster than base. Overall value market share of 25%. I hand it over to Ashish to talk to you about the financials.
Thank you, Sunil. As Sunil mentioned, we had a strong quarter. Standalone revenue growth of 16%, consolidated revenue grew 18%. Growth was largely volume-led and broad-based, with India growing at 13%, international and non-branded delivering 11% and 41% respectively in constant currency. Growth was also complemented by margin expansion. Our standalone EBITDA grew at 51%, while consolidated EBITDA saw a 27% growth. Margins on EBITDA level expanded by 100 basis points over last year. In terms of consolidated financials, I think we have spoken about the numbers. Full-year growth was at 15% and EBITDA growth was 12%. Of course, we were impacted by the high tea cost in the first half of the year.
Through the year, coffee in U.S. specifically remained elevated, and therefore overall EBITDA margins contracted versus last year. On segment, I think nothing particular to report. India has significantly improved over last year. While international and non-branded, we saw some contraction in margins while the growth remains healthy, largely on account of the overturning of the commodity cost, U.S. coffee in international and overall terminal price impacts in non-branded coffee. I think that's all from my side. We will probably spend more time on Q&A. Turning back to Nidhi.
Thank you. Thank you, Ashish. Thank you, Sunil. Yeah, moderator, we can go to the Q&A queue now. Requesting all participants to limit their questions to two at a time please.
Thank you. Ladies and gentlemen, we will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question and to restrict to two questions at a time. Ladies and gentlemen, we will wait for a moment while the question queue assembles. We will take our first question from the line of Mihir Shah from Nomura. Please go ahead.
Hi, sir. Thank you for taking my question and congrats on a good set of numbers. Firstly, on gross margins, they have compressed sequentially. This seems largely due to the non-branded coffee and international business, while India margin seems to have improved. With the elevated cost levels from crude and fuel, et cetera, that we are seeing now, can one expect the near-term margins to be under pressure? What level of margin should one consider for FY 2027, especially when you say A&P will go back to 7.5% from 6.7% in FY 2026, that we saw, and with the rising pressure on our RMs that we are seeing currently? That's my first question.
Let me answer that distinction. We've seen some increases in packaging costs, et cetera, number one. Number two, we've seen some increases because of places where we use LPG. The good and bad part of our portfolio, I think we've got a fairly balanced portfolio of, I would say slightly stronger commodities and a piece of highly processed food. So far, we've not seen a big impact on the margins per se. If fuel price goes up, then it's broad-based inflation, and then it's a different story. With the current set of variables, we don't see a high pressure per se.
I think we've got enough in our equity for all the categories for us to take increases to make sure we will mitigate margins. Let me put it this way, I wouldn't lose sleep on trying to figure out margins, at least in the next two, three months. Longer term, your guess is as good as mine, but right now we remain confident of delivering top-line numbers. EBITDA ahead of top line, right? Top line we will grow at double digits. Yeah.
Understood. Just one small clarification there, Sunil. Should we still hold to that 50, 70 basis points of expansion over FY 2026 that we had indicated? Or do you think that it can come with a little bit of delay?
No, no. 50-75, 80 basis points is a given. I mean, it's not an option. We will deliver it, number one. Number two, just a rider saying that we've got seasonality in our businesses, so it'll be quarter to quarter. It's not that it's automatically jumping up to the 50 to 100 for the full year number straight away. You have to cycle quarter by quarter because we've got seasonality. You will see that in play. 50 to 75 for the full year will happen.
Understood. That clears. Thank you for that. Secondly, you know, when one looks at the Sampann growth of close to 70% is a material step up. You know, if you can share your thoughts on what really drove this. Was it largely due to the higher NPDs that we've seen, or there was some tailwind from the new GTM strategy that is going about? Also on Sampann margins, you know, post the beverage margins recovering, can one assume that the food and beverage margins are at similar levels and Sampann margins have seen some improvement? Your thoughts on both these.
The reason for Tata Sampann growth from a portfolio perspective is, I would say, broad based, but a little bit of higher impetus in the NPDs. But we've seen growth across pulses, poha, vermicelli, everything. I mean, whole portfolio. I think we're getting stronger as a brand and portfolio per se. That's number one. Number two, the quick commerce, e-commerce shift by consumers is helping us as well, because then distribution and availability is not a constraint, and we're able to reach every single consumer.
That's number two. Number three, from a margin perspective, we've always said there's no reason Sampann can't hit a mid-teens plus number, and we're starting to get close to that. But we don't look at food and we look at tea separately, we look at salt separately, and Sampann separately. Salt is on a very strong wicket. Beverages has come back to a strong wicket. Sampann per se is, I would say, headed towards a mid-teen sort of margin. From a margin perspective overall, I would think we're in a good place.
Got it. That's all from my side. Thank you very much and wishing you all the best.
Thank you. We'll take our next question from the line of Abneesh Roy from Nomura Institutional Equities. Please go ahead.
Congrats. Two questions. First, of course, on your comment that the market share data you may stop giving and is more from an execution part rather than a benchmark. Specific question is, how do you then benchmark? Because you must be having those e-commerce, quick commerce data which you must be getting. How reliable is that? Apart from this, if the data is not covering so many channels, how relevant is it even from an execution part of thing? How relevant is it from that also?
You know, for quick com, e-com, the good part is Nielsen does have a panel and does give us data, right? We get that data. By the way, we're market leaders on tea on quick com and e-com, right? I would just urge you to go through different annual reports, different analyst calls to pick up numbers and do comparisons on tea, number one. The reason I say benchmarks is my team has got very, very specific targets in terms of channels, in terms of numeric reach, et cetera. More than market share, I mean, the numeric reach, et cetera, is what I would look at, share among handlers and numeric reach. The overall market share, I would say, I would say broadly, I don't find the directional numbers right.
That's why we're stopping to publish because I don't want to get this discussion every time saying the numbers are not right, et cetera, right? Salt, by sheer weight of the fact that we've got a 40% share and therefore we're very highly distributed and we are the number one, right? I think broadly the number works. I don't have any benchmark anywhere in the industry to do any other comparison on salt. That's why salt we'll still look at the number. Beverages, like I said, 25%, we just give the number, right? 20% is quick com, e-com. Out of 15 modern trade, if you take out half, it's about another 7%. Institutions is about 4%, 5% for me. Overall, GT is just about 55 and the number is off, right? Doesn't make sense.
Understood. Second and last question will be on the beverage business. Two sub parts here. One is Campa is now number three in water, PAN India, very aggressive advertising, INR 15 pricing, Campa Sure, Amitabh Bachchan brand ambassador. Here specific question is, from a margin perspective for you in NourishCo , how are things? From a long-term growth perspective, given Campa will keep getting more aggressive as they get the back end right, how is the long-term growth? I'm sure next two quarter the growth will be very strong given the El Niño impact. That's the first part. Second part, very small. U.S. business, you highlighted margins will improve, what about pricing? In developed market, once commodity cools off, pricing also cools off very quickly, right? If you could comment on that part.
Let me go with the second answer first. Number one is today, while commodities costs have softened, there is inventory in the channel of raw material, and therefore, the entire margin expansion hasn't happened. Even after, I would say two, three months when the inventory levels start to go down and the newer inventory starts to flow in, the margins would just come back to where they were for the industry before this entire upcycle on coffee prices. That said, you could see action on pricing, specifically driven by promos on the shop floor. We remain alert to that.
I would say till broadly the industry comes back to the margins which used to be there just about two years back, I don't see too much of a fight breaking out on the shop floor, and therefore margins, I would say, would broadly. Will they come back to exactly where they were? I'm not sure. They will definitely improve from where we are currently. That's the reason why we remain extremely confident. That's number one. By the way, the good part is even in this scenario of compressed margins, we've continued to drive significant top line and therefore gain market share in the U.S. So that's one. On the second part, I wouldn't compete about competitors with numbers and data which I am not too clued in about.
All that I can say is we remain confident of growing 30% consistently and improving our whole margin portfolio profile as well. In NourishCo, we have three different verticals that we are very clearly focused on. Number one is water in its whole stack, and you'll see a bunch of launches happening. Right now we have Himalayan, we have Spring Alive, we have Alkaline, and we have Tata Copper. You'll see more of launches across the spectrum. Functional waters. That's number one. Number two, you have affordable cups, and I would term it as affordable and profitable cups, right? I wouldn't worry about people trying pricing actions in that category. The number three is where I have every right to win, which is tea and coffee.
We have right now Kombucha, green tea, fruit tea. We've got coffee in cans and coffee in PET, and you will see more launches in the tea space, as well as we go forward. We've grown Tata Copper by 33% last quarter. There's no reason why this trajectory can't continue at this level for a long, long time because, A, we do have a strong brand proposition. B, we've still, I mean, not covered the entire country in the manufacturing distribution terms. And C, per capita consumption of water itself is at abysmal levels in India when you compare to the rest of the world. Geographic expansion, per capita consumption, and portfolio expansion, all three will drive NourishCo.
Thank you. That's all from my side.
Thank you. Next question is from the line of Vivek Maheshwari from Jefferies. Please go ahead.
Hi, Sunil and team. Two questions. First one is on the growth categories. You know, now that Capital Foods and Organic India are kind of, you know, doing well in the domestic market, are you thinking about more acquisitions and adding, you know, more to your growth portfolio? Where do you think its salient settles at in the next three-four years? That's the first question.
Vivek, let me say, while we've improved our performance in Capital Foods and Organic India, I think we've got a runway to improve it still more significantly. With the split GTM that we have rolled out, we have already started seeing My single biggest indicator is lines sold. For that, we have started to see significant improvement in Capital Foods and Organic India when I look at by category. When I look by type of distributors, the growth guys are growing the fastest on lines per outlet, which means we are doing the retailing and distribution of the products backed by media spends on the brand as well, whether it is Sachin Tendulkar, or it is Ranveer Singh on the Capital Foods side.
I think that's doing very well for us. You'll see a lot of innovation also rolling out in the pipeline. Therefore, we should be accelerating on Capital Foods and Organic India. You will see a lot of launches organically across different platforms as we go forward, including some new platforms that we're gonna launch. Therefore, the growth portfolio will continue to chug along at this 30% number, at least in the near term.
On the acquisitions front, we remain open, but right now, let me say what we like is not for sale. What is for sale, we don't like. From that perspective, if and when something comes along which we think will be attractive, we will look at it. We've never said no. In terms of percentage, right now for the short term, short to medium term, I would say 30% growth is a given for the growth businesses. We will keep recalibrating as we go forward.
Interesting. Got it. The second bit is, you know, you have already answered, you have a very unique raw material basket versus most of your competitors. You have mentioned about international margins and drivers for that. Because of this volatility and whatever, you know, geopolitical bit, whether from margin perspective or growth perspective, should there be anything that we bear in mind, from, you know, U.S., Canada and U.K. perspective that, you know, in case if geopolitical things do not settle down in time, are there any areas? Because this is a piece which is very difficult to understand for us sitting in India. Just wanted to be sure on that.
Overall, if you look at it, Vivek, how does the entire Middle East situation impact us? Number one is in terms of availability of raw material and therefore business continuity, right? For the India business itself, we used to have some plastic closures and PET, et cetera, which we used to import. We've already shifted about, I would say, about 15, 20 days back, and we are fully I mean, there is no issue on continuity. That's number one. Number two is the issue is LPG. LPG for specific categories where we used to use LPG, most of the places we found alternate suppliers who are supplying without a problem and/or we switch to dual use burners. That is not an issue at all.
The third piece is where if there is a fuel price increase and there is broad-based inflation, that is what should worry us. As of now, I mean, I'm not sure where this is headed. I don't see a reason why it should only impact us. It'll be an industry-wide phenomenon if it happens, and therefore you would see price increases with people making sure margins are protected. My hypothesis is if there is a broad-based fuel price uptick, it will translate to price increases as everyone in the industry moves to protect margins. Per se, as of now, with the moves that have happened, I don't see too much of an impact. If there is an impact, like I said, we do have the equity strength to take pricing and make sure we mitigate that.
Sunil, just to confirm, whatever comments you have made, you know, just now are applicable to international business, each of the geographies as well?
Absolutely. International, remember in U.K., Canada, et cetera, it's primarily tea, and therefore, I mean, the big, big impact is tea prices more than anything else, and that hasn't changed. Similarly, in the U.S. it is coffee, which is probably 90% of my business. Again, coffee prices are coming down rather than going up and therefore doesn't change. There might be minor uptick here, there, but nothing significant.
Super. Thank you very much. Wish you all the best.
Thank you. Next question is from the line of Nihal Jham from HSBC. Please go ahead.
Yes, hi, Sunil. Good evening. The first question was on Capital Foods and Organic India that, you know, there was an impact in the international, but we had the thought that even the domestic portfolio could start touching a 30% growth this quarter itself. What are the issues? It's mainly the distribution which you've rehashed, or there is some other issue which has come up for this quarter as well.
No. This quarter, Organic India did touch close to 30%. I think it was 26% or 27%, if I'm not mistaken. Capital Foods was a bit subdued. I would have loved for it to grow, but it still grew double-digit. The primary reason was as we relaid the entire go-to-market, remember between November and February, we relaid our entire go-to-market in the top cities. That had a bit of a hiccup. That said, we remain quite confident of coming to the 30% mark very quickly.
Understood. The second question was on the tea bit. Last quarter you did highlight there was a worry of a slight spike. I think in the opening remarks you did mention about some comfort. Just to clarify that on the tea prices, there is comfort that at least based on showing that you're seeing that the prices look comfortable for the year ahead or at least for the season ahead.
Like I said, I've stopped trying to forecast commodities too far ahead because things go up and down. As of now, for this year, tea prices have trended well. They are roughly, I think, in the same ballpark as the price same period last year, and so therefore it's largely benign. That's why we had given off pricing to make sure that we are competitive. As of now, we don't see any reason to change the guidance for that.
Just one last question on Sampann. It's obviously great to see the kind of growth the business is delivering. I think when you mention about the margin, you're referring to the MAP or the contribution margin that you highlighted earlier. When is it possible that, you know, on the EBITDA bit, Sampann gets profitable and it starts giving a sizable contribution, given on top line it's already, you know, the fastest growing part of the portfolio.
See, in a structure like mine where my front end is common and my entire back end operations are common, I would not try to do a mathematical exercise to allocate overheads by different categories and therefore calculate EBITDA, right? I mean, we've always maintained saying we will do a P&L by category up to margin after promotion and advertising expenses. Below that, all the costs are all fixed. I mean, the targets for the teams who are handling those lines are fixed costs. That's how we play it. For every single category, whether it is, I mentioned the 33%-35% for tea or the 35% range for salt or the mid-teens for Sampann, it is all margin after promotion expenses.
Understood. That's it. Wish you all the best.
Thank you. We'll move on to our next question from the line of Aditya Soman from CLSA. Please go ahead.
Hi, good evening.
Sorry to interrupt, Aditya. Please use your handset mode.
Yeah. Hi, good evening, and thanks for the opportunity. Two questions from me. Firstly, we've received also feedback from sort of the quick commerce players and e-commerce players about how Tata Consumer is doing, or is amongst the best performing companies on their platform. From your perspective, what has really worked well and has allowed you to outperform, even compared with GT, where you had long-standing relationships? That's 1. Second, on tea, despite obviously you're doing very well on these channels, the 4% of volume growth, would you say that's a satisfactory number or would you sort of aspire to see that number improve over the next few quarters? That's it.
Let me answer the second question first. We've always mentioned for tea we will target mid-single-digit growth and a couple of basis points of price mix, therefore mid-to-high single-digit total top-line growth. From that perspective, we are almost there, but not there in this quarter. I would aspire for a slightly higher number. That's number one. Number two, on the quick commerce, e-commerce, BAS, our philosophy is very clear. We will be where the consumer is, and if the consumer is shifting from GT modern trade to e-com, quick com, we will be there first, and then we'll figure out all the other pieces later. That's, that's been our motto, number one. Number two is, remember we came from significantly behind on distribution.
While you might say relationships on GT, when we started six years back, we were half a million outlets, with a numeric reach of two million. Today we are about at two million outlets with a numeric reach of 4.5 million, right. From that perspective, we've expanded significantly, but we are still behind where we want to be on distribution. The ability to reach consumers through quick com, e-com, and gain momentum is primarily because, A, we've got the most trusted brand name in the country. B, we are very, very sure of the quality of the products that we offer, and therefore, when we connect straight with the consumer, we hit it out of the park, right.
In fact, that is one of the things which I use to beat up my sales guys, saying, "As long as I am talking straight to the consumer," which is what happens on quick com, e-com, "I am a winner and I'm number one," right? Therefore, if they get my execution right and close distribution gaps, there's no reason I shouldn't be number one even in GT channels.
That's very clear. Just in terms of profitability across channels, would it be fair to say that like for like for the same products, profitability could be lower on these new channels, but obviously you see more premiumization, so overall the product or at a category level, your margins could be better. Would that be the right way to look at it?
You have to remember when you put all in costs, right? If you look at only up to gross margin level, there are different costs on different channels. If you take the cost of the field force and put it onto GT channels and the cost of logistics, and you put the visibility on the e-com, quick com channels, you might broadly be surprised that it lands up in the same ballpark. I wouldn't want to do that calculation. The other piece, like I mentioned, right, I would rather go play where the consumer is, even if it's a slightly lower margin than not go just because it is lower margin and land up with no margin, right? That's number two. Number three, remember there is a game of ROAS as well.
As you build scale on these channels, you initially have to spend higher visibility to get momentum going. Once you get momentum going, that same advertising dollar gives you significantly higher return by building scale. There is an advantage to be had by first mover, and I do think that in quite a bit of the categories we're getting there.
That's very clear. Thanks so much for such a detailed answer. Thank you, and all the best.
Thank you. Next question is from the line of Jayant Parasramka from 3P Investment Managers. Please go ahead.
Yeah. Hi, thank you for the question. Just a couple of points on A&P spends. If you were correct, you said it is going to go up. With gross margins likely to be under pressure in some of the categories, we still think about 60 to 70 basis point EBITDA margin expansions can happen, yeah, given how status, current status quo which we are maintaining.
Couple of things, right. As long as I don't increase the middle of my P&L, my top line continues to grow double-digit, it has to drop to the bottom line. That's number one. Number two, I did mention that if there are some tweaks and some small niggles on cost aspects, we have the ability to take pricing up and therefore make sure that margins are well protected. I wouldn't worry about it. I would say a food business in India should be between, I would say 7.5% to about an 8.5% sort of, 7%-8.5% sort of, A2S ratio. We're broadly operating in that ballpark. Even if you look at the full year, we are almost in that ballpark, right.
For the full year, there will be ups and downs in quarters because, for example, for tea there is a peak in North India in quarter three, for example, quarter three, quarter three. You will find slightly ahead of that advertising ramping up. For example, there are specific big days and big events around, we will ramp it up then. Broadly in the ballpark, we should be in the seven sort of range coming in, and I don't expect that to impact my overall EBITDA margins.
Sure. My second question is slightly strategic. I'm just trying to understand, on Tata Sampann you've launched protein Makhana, and also you have a brand Tata Simply Better. Just from an Indian perspective, are you seeing people move towards more healthier kind of food? Is that a strategic shift which is happening pretty fast, and are we looking to take advantage of that given our scale, given our bigger scale as a business?
Absolutely. If you saw the slide on innovation is focused on the three big macro trends in the Indian consumer: health and wellness, convenience, and premiumization, right? The other piece is communication moving to digital and online shopping as well. You see us going aggressively between eCom, QuickCom, and therefore rupees also being spent on that. That is a secular trend, number one. Number two, you will see Sampann and you'll see Tata Simply Better. That's because the base categories we are present in Sampann, and when we are adding something, subtracting something, making sure it is better than what you consume on a regular basis, that is branded under Tata Simply Better. Cold-pressed oils is not your regular oil, it is better for you oil, and therefore it is Tata Simply Better.
Sure. Thank you for that.
Thank you. Next question is from the line of Kaivalya Baing from IIFL Capital. Please go ahead.
Hi, sir. This is Percy here. Can you hear me?
Yes, please go ahead.
Yeah. Good. Hello.
Yeah. I just wanted to understand, on tea cost, did you say that it is in FY 2027 likely to be flat YoY?
Percy, I said as of now we are seeing it roughly flat. I've mentioned on a couple of calls, I've stopped trying to forecast commodity costs too far ahead because with all the bumps that we have on climate, weather, et cetera, I don't know what I don't know. We will react, we'll be agile to move pricing, et cetera, in line with the commodity trends. For now, the season has already started. Plucking and auctions are up fully in April. We are seeing costs roughly benign.
Okay, let me put it other way. The tea margins that you have enjoyed in FY 2026, the India tea margins, are you happy with that or do you plan to see a expansion in those margins in FY 2027 through initiatives of your own? If there is a small cost impact you will pass that on, so therefore you will still see an expansion in India tea margins. Would that be a fair assessment or no?
Percy, the tea margins for Q4 are roughly where we want to be. We were not there in the beginning of the year. It started expanding as we went through the year and we had taken pricing and costs went down. Roughly right now we are where we should be, and we will aim to be in this ballpark.
Understood. Secondly, just wanted to ask on product portfolio. Over the last few quarters you've launched several products and categories. Do you think that your product portfolio is now more or less complete and you would focus more on driving sales in the existing products? Or would you plan to expand it further?
Percy, with our ambition of growing double-digit and continuing to deliver EBITDA margins or EBITDA ahead of top line, we will not only grow our organic portfolio which exists today, but we will continue to drive, as I've clearly mentioned saying, it's distribution, marketing, brand building and innovation, right? As we see consumer trends come up, you will continue to see innovation coming out. I think we are a long, long, long way away from saying we've got the perfect portfolio. I do think we will continue to aggressively expand distribution, continue to spend behind building strong brands, and continuing to expand on innovation.
Can you give some gaps as to where broadly, of course I understand you can't comment on new launches, but where broadly do you think are the gaps in your portfolio which you can sort of fill over the next one or two years? A related question is that as I see it now, your portfolio is actually pretty wide. Do you run the risk of spreading yourself too thin in terms of proliferating the number of products and not being able to give enough attention and focus on an individual product from a sort of either a sales point of view or a general organizational point of view?
Percy, last three quarters I think we've been in a strong double-digit top line growth 18%, 15%, 18%. That's number one. Number one, these are all driven by base UVG and not by pricing actions. I think that proves the ability of the system to execute all these innovations at scale. That's number one. Number two, remember, not all the innovations that you see are immediately lining up in the distributors' warehouses and therefore complicating the system. Today, there is this beautiful channel called eCom, QuickCom, which allows you to launch. Your test market is, you can do it in a city on QuickCom, do a quick test, and then roll out total QuickCom, then modern trade, then SAMT, then GT.
As long as your playbook is very clear on how you're going to expand at lowest risk, lowest cost, and highest impact, I don't think there is a problem in launching innovation, right. The critical piece is to have your framework on where you want to play and launch innovation in that space. I think that is the more critical space. I wouldn't see an issue out there. As far as portfolio goes, let me just leave you with we are right now in the food and beverage space, which has still got, I would say, enough white spaces for us to go after, especially in very, very specific nutrition, health and wellness, and premium categories. You will continue to see launches across our portfolio in that space.
Got it, sir. Last one. Can you just give the ARR of Sampann as a brand overall, including all its categories?
Sampann overall for the full year ended at close to INR 1,400 crores. Remember, starting from a 35%-37% growth, if I'm not mistaken, in Q1, we are now at a 60%.
Sampann. INR 1,600.
Oh, INR 1,600 crores is the actual number for Sampann for the full year per se.
Okay. Okay. That's very helpful, sir. Thank you so much.
Thank you.
Moderator, we'll go to the webcast now and take a few questions from there.
Sure. Please go ahead.
Okay. There is a question from Atul.
I'm sorry to interrupt. Can you come a little closer to the microphone? You're sounding distant.
Sure. Sure. Okay. There is a question from Atul. He's asking: What is your strategy on tactical aggression in high margin protein segment? Are we looking to go organic or all options on the table given that we have enough cash on our balance sheet?
Let me answer it in this way. Yeah, protein is a segment which is trending, and we are looking at it closely. The acquisition strategy doesn't pertain to protein alone. As I said, we're very clear where we want to play, where we don't want to play. If there is an attractive acquisition which comes across any of the segments that we play in, we will look at it, protein included. Protein per se, you would have seen some of our launches come out, Makhana, for example, or we've launched Edamame, et cetera. Let me just say it's a teaser. You would see much more ramping up in this space, but ramping up with a plan.
Thank you. Thank you, Sunil. There is a question on consumption patterns. Atul is asking in terms of the adoption of semaglutide, which is the GLP-1 trend that we are seeing, how are you developing products that serve the needs of that category?
GLP-1 support is what food and beverage companies are looking at. We're also looking at that. The thing right now, there is nothing on the anvil. We will wait and watch, we trigger ready to see if this category takes off.
Thank you, Sunil. There is a question from Omkar from UTI Pension. He's asking: Organic India has approximately 40% revenue coming from exports. Yet it has been able to grow 24% during the quarter. Capital Foods has approximately 20% export mix, and yet it has delivered below expectations. What could possibly be the reason for this?
The primary reason is because for Organic India, the single biggest market is the U.S., and we carry inventory onshore out there in the U.S. During the tariff up and down, which impacted Organic India quite a bit, we had pumped up inventory, and therefore there was a enough inventory sitting onshore in the U.S. Whereas for Capital Foods, it is FOB India to many of the retailers, and most of them do U.S. trans shipments happen at the Middle East, et cetera. That shipping got disrupted in the month of March. Come April, it is back to normal, and we do expect to start delivering decent growth even in that category.
Thank you. Thank you, Sunil. There is a question from Abhishek Mathur at Systematix Group. He's asking: What is driving the strong volume growth in salt? Is it coming from loose unorganized or there are some other drivers?
There are multiple drivers starting with the first listing, which I said when Tata Consumer was formed, we decided to play not only in vacuum evaporated iodized salt, we said we will play in salt. Actually, look, if you look at my salt portfolio today, it's almost like a Udupi restaurant, menu, right? You've got salt with zinc, you've got salt with iron, you've got salt light, you've got salt super light, you've got rock salt, you've got sendha salt, you've got solar salt, you've got vacuum evaporated. We have created a portfolio on salt which caters right from the premium down to a value play. That's number one. Number two, over a period of time, we've continued to build the brand with media and strengthen it.
Top of mind, I think right now, I would dare say, Tata Salt is probably right up there among the top Indian brands. Our top of mind is now about 88. 88 out of 100 Indians, if you ask them salt, they'll say Tata Salt, right? As simple as that. Number three is distribution, and we continue to expand, and we continue to re-engineer our distribution systems to make sure we are delivering. There were very many cities, I think 24, if I'm not mistaken, where salt was overwhelming, and therefore, if it's a very, very strong market, it's good to separate it out to give it single-minded focus. That has started to play off as well. Yeah, multiple things in play, I would say, not one.
Thank you. Thank you, Sunil. There is another question. Perhaps in the interest of time, we'll take one last question. There is a question from Bharat. He's asking what is explaining the unbranded solubles growth, given that coffee prices are in deflation now. What is the outlook for this segment on growth and margins in FY 2027?
The growth is primarily when you compare with last year. The coffee prices are elevated even when you compare to last year, and that is what is driving the unbranded soluble growth. Incidentally, on the unbranded solubles growth, just FYI, I think Vietnam is now running at a 99% utilization, and we had already started a project to expand capacity out in Vietnam, which should be online by, I think, very early in 2027. That will give it the real next leg of growth going forward. Today our board has also officially approved capacity expansion on tea extracts, which again, we're running out of capacity, and we will start on that project as well. The whole solubles unbranded business will continue to go from strength to strength.
Thank you, Sunil. With that, we'll conclude this call. I know we are running out of time. There might be some pending questions, in which case you can get in touch with me or Kaivan from the investor relations team. Our details are on the last slide of the investor presentation. On behalf of the management, I want to thank you all for joining today and have a great evening.
Thank you. On behalf of Tata Consumer Products Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.