Tata Global Beverages (TGBL) on Tuesday said it has entered into a non-binding term sheet to acquire the branded tea business of Dhunseri Tea & Industries.
In line with its ambition to grow the branded tea business in India, Tata Global Beverages (TGBL) on Tuesday said it has entered into a non-binding term sheet to acquire the branded tea business of Dhunseri Tea & Industries for an aggregate consideration of up to Rs 101 crore.
“The proposed acquisition shall be subject to due diligence, signing of definitive binding agreements and applicable shareholder, statutory/regulatory and other third-party approvals, as may be applicable,” TGBL said in a stock exchange notification.
The branded tea business of Kolkata-based Dhunseri Tea and Industries is currently carried out under the brands ‘Lalghoda’ and ‘Kalaghoda’, which are among the leading local brands in Rajasthan, a market which is dominated by local players, the Tata Group company said in the notification, adding that the proposed acquisition is in line with its ambition to grow its branded tea business in India.
TGBL said during the last financial year, its India tea business clocked a 9% volume growth and 7% value growth across its brands. For the March quarter last fiscal, the tea business in the country registered a 12% volume growth and 11% value growth.
The company on Tuesday reported a 49.71% year-on-year fall in its consolidated net profit at Rs 35.99 crore for the March quarter of the last financial year. It had posted a profit of Rs 71.56 crore in the March quarter of financial year 2017-18. For the quarter ended March 31, 2019, the company’s consolidated revenue from operations grew nearly 5.16% y-o-y to `1,755.46 crore compared with Rs 1,688.40 crore for the same period last year, according to a separate stock exchange filing.
“Profit before exceptional items and tax at Rs 161 crore is higher by 24% compared with corresponding quarter of the previous year mainly due to higher sales, lower commodity cost in international markets and improved performance of non-branded business,” it said.
On international operations, it said, for the quarter the UK business delivered a revenue growth of 4% in underlying terms, led by a volume growth of 7%. For the full year, it registered a volume and value growth of 2% and 1%, respectively.
“Tata Starbucks clocked a strong ~30% growth in revenues for the year. It added 30 new stores during the Year, taking the current store count to 146 stores across India. It recently opened its largest coffee forward store in Bengaluru, celebrating every aspect of the coffee journey through live coffee brewing experience,” it added.