‘No rush to do acquisitions, focus is on execution’: Tata Consumer’s MD & CEO Sunil D’Souza

1) Growth businesses have become larger than your tea and salt portfolio in India at Rs 1,314 crore versus the latter’s Rs 1,234 crore in Q1. What is driving your growth business?

Three factors have driven growth businesses. First, we’ve restructured our go-to-market model by separating growth businesses across about 80 cities in India. We’re already seeing early results of this reorganisation. Second, innovation remains a key focus for us in this vertical. Third, we’ve backed our brands with sustained advertising and promotion. While we had guided that these businesses would contribute about 30% of the India portfolio, they are already at 36% and grew at 47% in the June quarter. We see this momentum continuing into the future as consumers evolve in terms of their preferences. In three years, the contribution of this business could rise to 40-45% of the India portfolio.

2) Acquisitions have been central to your growth businesses. Will you look at any more this year?

We will continue to evaluate opportunities. Our priority though is delivering on Capital Foods and Organic India in terms of our targets. There is no rush to do acquisitions, the focus is on execution. We will look at inorganic opportunities, but only if they make strategic and financial sense. In terms of areas, health, wellness and nutrition are where we would consider adding capabilities in the future.

3) Inflationary pressures are building up again. Where are you seeing the biggest impact on the business? And is it a concern for you?

The biggest pressure points today are fuel and packaging. If fuel prices remain elevated, inflation will eventually flow through to the entire supply chain. We’ve already seen higher coal costs and currency-related pressures in our salt business, which required a price increase. If this trend continues, there will be pricing action this year. The biggest variable in our business is inflation. Government measures and lower food inflation have supported consumption over the past few quarters. But if elevated crude prices translate into sustained downstream inflation, discretionary spending could come under pressure.

4) How do you see FY27 shaping up? Do you see volume growth or price growth driving topline? 

We will continue to target double-digit revenue growth this year. We’ve also guided for 50-70 basis points of Ebitda (earnings before interest tax depreciation and amortisation) margin expansion this year. This quarter, India delivered 13% underlying volume growth. If inflation persists, pricing will become a larger contributor, but ultimately our job is to deliver revenue growth while protecting profitability.

5) Quick commerce has become a meaningful part of your business. What’s driving it?

Quick commerce and e-commerce together now contribute 21% of our sales, compared with about 15.5% a year ago. Our philosophy has been simple: We will be where the consumer is. We invested early, built capabilities ahead of the curve and today hold leadership positions in several categories on these platforms. Quick commerce also allows us to test products, promote and price them much faster before scaling them through offline channels.

6) Premiumisation remains a key theme. How are you balancing that with affordability?

Our innovation pipeline is built around three consumer trends—convenience, premiumisation and health and wellness. Across categories, we’ve layered premium products over our base portfolio, whether it’s dry fruits, edible oils, value-added salts or premium teas. Premiumisation is important not only because consumers are trading up, but also because it helps improve gross margins over time.