A couple of years ago, I was here speaking to Sunil D'souza about the journey at Tata Consumer Products. The revenues are now closer to $2 billion. Where does the next billion dollar come from? And back here, the same very place. Sunil D'souza with me. Thank you so much. Always a pleasure speaking with you. And let's start with that itself. I mean, a billion dollars added over the last 5 years in your revenue. Where does the next million dollars come from and when?
So, Mangalam, as a company we have said we wanted to be a premier food and beverage company and then a total FMCG company. I think we're about 30-35% of the way there. We've still got a long way to go. The good part is over the past 5 years, topline double digit 13% revenue, 14% EBITDA, 23% net profit. I think it's been a good run for the last 5 years. Going forward, we're continuing to target an aggressive growth rate, double digit top line again. EBITDA margins, we're extremely aware that we are one of the lower ones, so that will grow far faster than topline. The aim is to double TCPL in double quick time. If we continue at this pace, I think we'll get there.
Okay, so you know one of the things that you had said also in the past that you were 15 minutes into a 2-hour long movie. How far along have we gone since then? I would probably be 30-35. It's 30-35. So you've still got a long way to go. You've been speaking about decommodifying your business. Since then you've made a couple of acquisitions. The increase that has come in from your non-commodity products in sales has also visible but still there is that element of commodity. If you could give us a number, where does that number stand at right now versus what it was earlier and what's your target here?
So Mangalam, let me answer it in two different ways. If you look at commodity and margin pressure, you're absolutely right. Last quarter actually my EBITDA was about flat compared to last year despite topline growing 17%, which in percentage wise we had gone down. That is for two specific reasons. One is tea in India and coffee in the US. Coffee in the US is a global issue. We've announced a price increase effective June, so we will be getting back on the US margins quickly. The India margins on tea were a question of supply demand in the last season. This season, if everything is right, we should be coming back to par very quickly. Number two, the way we've constructed our portfolio today is primed both for topline as well as margin expansion. I broadly see my portfolio in three parts. First, a steady India tea, India salt, and the international business, which will grow mid to high single digits and deliver predictable gross margins. Second, a fast growing huge TAM opportunity of Samp; per capita are low, branded penetration is low, commodity penetration is low, so Samp is close to double digit margins. Ready to drink is slightly lower but fast topline. Third, a set of slightly lower TAMs but very strong brands, very high margin: Capital Foods, Soulful, Organic India. Organic India supplements is 70% margin, Capital Foods 50%. These are fast growing and will add to margin profile. Margin expansion at the top will drop to the bottom.
So you know let's take all of these pieces individually. Let's start with organic and capital foods. Last year because it was a year of consolidation and you were trying to fix the inventory etc., you were pretty much at the same level as FY24. I remember you telling me that at a business case level, Capital Foods could actually do 30% margins versus the 20-24% at acquisition. Even organic you were hoping of manifold growth because of product quality and distribution mismatch. They were in 28,000 outlets versus your 4.4 million. How much of that has already happened? In how many outlets are these products available and what are the EBITDA margins? What can we expect in the next couple of years?
So, Mangalam, we don't count every category EBITDA margins because it's a common distribution system, so we look at gross margins. Capital Foods is 50% accretive, Organic India base products 50%, supplements 2x. It did take us time; we grew Capital Foods by 30% from acquisition. Last quarter was big due to weak comps. We think we can grow 30% consistently. It took 5-6 months to understand the categories and weighted distribution. Now that weighted is fixed, we will see expansion in distribution and portfolio. 330 crores this quarter; 500 crore run rate should happen in second half of this year.
And what about increasing the TAM in these? You spoke about Soulful and Organic. Are there thoughts of expanding the positioning of Organic India and Soulful beyond what they are now?
So absolutely, Mangalam. Brands with strong propositions can leverage into adjacencies quickly. Soulful entered rusk, a huge unbranded segment. Capital Foods: we are expanding into noodles with a differentiated play, not mainline. Also Korean cuisine launches under Capital Foods.
And as you increase adjacencies, you face competition from strong incumbents. For noodles, the market leader is high. For rusk, Britannia is top. How do you compete?
In all these categories, I play a differentiated play, not targeting 50% share. I target a profitable niche I can own, not discount my way.
Let's talk about NourishCo. Start of last year you said 1,000 crores. You ended at 850 due to competition. So 1,000 in FY26? What's the growth path? Also, B9 Beverages says 59% from no/low sugar, functional beverages doing well. Are you considering sports drinks?
In NourishCo, we maintain differentiation, no carbonated drinks. Sports drink coming in 15 days. Energy drink being relaunched. We grew 17% volume, 10% value last quarter, exited March at 38% volume, 26% value. We can grow 30% consistently. Recalibration is par for course in fast-growing emerging markets.
Electrolytes? We're looking at that category closely. I saw many offerings in Hyderabad and Chennai; it's fragmented. Also, you were part of the team that invented Sting. Why not get aggressive there now?
We had to fix the base business first. Now we're back on base. We got into alkaline water. Pilot in Bangalore went well, rolling out quickly. I chase niche spaces for differentiated, sustainable business.
Is anything dairy related on the cards?
No, we are not. See dairy, Mangalam, let me be upfront. Either you are in dairy or you're not. There is nothing you add to dairy.
So then how do you address the need for or the high demand for protein products in the country?
So protein is a space we know we got to get in at some point of time. We did try a small trial with something. I think we learned a lot and we also learned that it's not as simple as just putting a product and getting out. We need strong science backing for that. So we've taken a step back, evaluating it, and we will come back to it.
