​​​
  1. Kotak retains ‘Add’ on Tata Global Beverages with TP of Rs 160

Kotak retains ‘Add’ on Tata Global Beverages with TP of Rs 160

TGBL’s Q4FY17 print was a mixed bag with a miss in its domestic tea business while Tata Coffee, CAA, UK, non-branded business and JVs did well.

By: | Published: June 6, 2017 3:38 AM
Tata Global Beverages, Tata Global Beverages news, Tata Global Beverages latest news, tgbl, tgbl news, tgbl latest news EBITDA miss was due to higher A&SP spends, up 90% y-o-y of a low base; 33% above our estimate, to support multiple new launches and new Jaago Re campaign. (Reuters)

TGBL’s Q4FY17 print was a mixed bag with a miss in its domestic tea business while Tata Coffee, CAA, UK, non-branded business and JVs did well. Overall, EBITDA was a tad below estimates due to higher A&SP to support new launches (in both domestic and international markets). We cut our EPS estimates by 7-10% to bake in Q4FY17 miss and commodity headwinds; retain Add and revise TP to Rs 160 , from Rs 150, rolling over to March-2019 (SOTP-based target).

TGBL’s domestic (tea business) posted a weaker-than-expected quarter on both revenues and EBITDA front – net operating revenues grew 3% y-o-y , 5% volume growth, 2% price deflation, EBITDA declined 16% y-o-y and recurring PAT declined 33% y-o-y. EBITDA miss was due to higher A&SP spends, up 90% y-o-y of a low base; 33% above our estimate, to support multiple new launches and new Jaago Re campaign.

Net operating revenues grew 5% y-o-y, 7% in c/c terms, to Rs 16.7 billion, highest in the past four quarters, EBITDA grew 12% y-o-y to Rs 1.79 billion and PBT (pre minority/share of associate earnings) grew 19% y-o-y to Rs 1.4 billion; we note recurring/reported PAT growth are distorted due to high impairment charge in the base quarter.

You may also like to watch:

EBITDA margin expanded 70 bps y-o-y led by 320 bps expansion in GM (largely led by lower coffee prices); however, a150 bps jump in A&SP and 80 bps jump in other expenditure curtailed margin expansion. For FY2017, the company reported revenue growth of 2% y-o-y (3% c/c), EBITDA growth of 21% y-o-y, PBT growth of 31% y-o-y and recurring PAT growth of 17% y-o-y; recurring EPS stood at Rs 6.1/share.

EMEA region posted 1.5% decline in revenues and EOC posted 9% y-o-y decline in revenues (10% in c/c terms). On the EBITDA front, domestic tea business posted 16% y-o-y decline. Tata Coffee standalone business posted 147% y-o-y growth in EBITDA (sharp margin expansion of 1,145 bps) and EOC posted 15% y-o-y growth in EBITDA.

Get live Stock Prices from BSE and NSE and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

  1. No Comments.

Go to Top