Online AGM experience of TATA consumer
products
Article published as on Monday, 6th July, 2020 at 5:30 p.m.
57th AGM of
Tata consumer products
Monday 6th
July, 2020 at 10:30 a.m.
The
AGM started using Cisco WebEx service
for streaming, logging in was allowed from 10:00 a.m. several ads were played
during this time and at 10:30 the AGM began the directors were present through
audio video mode but mainly managing director Sunil D’souza and Chairman N.
Chandrasekaran drove the AGM proceedings.
There was also no chat option during the session,
so people could not easily raise queries in the meeting itself, this was
something which should have been added
In
the first session the facts and figures relating to the company were presented by
the Managing Director Sunil D’souza and referred to this
presentation.
You
can refer to annual report by clicking
here
After
the presentation came the question and
answer session, here we can learn what many things from the management,
their vision, their plans for future, and their priorities.
I will write about speakers and
their queries and then the answers provided by the management
Speakers and Queries.
Arun kumar
Greeted everyone and asked about what is the
innovation being done by Tata consumer. And questioned that can we expect drinks
and product for diabetic people. He also asked on how well the digital
technology is being used.
Goutam nandy
Greeted everyone and did have a general queries
related to operations.
Ravi kumar Naredi
Asked about are there any future plans to merge
Tata coffee and any plans for future inorganic acquisition
Any big plans to enter ready to eat segment.
Tata cha is only in Bangalore, do they have any
plans to expand pan India?
Santosh Kumar Saraf
He started saying “Naye Bharat ki nayi meeting”
Benefits of online meeting were shared by him,
benefit is people from all over India can attend.
He requested to continue online meeting along with
physical meeting.
He also said it was good if more dividend was
given.
Raised same query on merger of Tata coffee.
Advised on selling more consumer goods just like
ITC did and enhance their consumer division portfolio.
Also asked cost of holding AGM last year,
Tamal kumar Majumder
Queries related to audited figures and other queries.
How are you dealing competition with HUL and other
regional brands?
And asked other operational questions like how is
company coping its logistics with the covid situation
And revenue contribution through digital source. Etc.
Jaydip Bakshi voice was not very clear
Asked if there are any plans for recyclable and
biodegradable packaging for products
Any chance of brining Eight o’clock brand in India
Thanked for spending more than required towards the
society (CSR)
Abhirup nandy – appreciated management
Tata’s own platform Tata cliq
Any chance of tie-up with other platforms such as
amazon or flipkart
Any plans for brand ambassador, also he thanked for
wonderful annual report
Meghna bajoria- asked question on impact of tea
price hike in India and Kenya.
Rachna Prasad- asked whether management has decided
to reduce the number of subsidiaries, the pace is slow she added.
H.S.Patel thanking everyone managerial personnel, IT
department MCA, NSDL
Questions- revenue increased significantly but PAT
increased by just 1%,
Never see Himalaya available even in big stores, so
no brand visibility.
And price of 250 rupees in Starbucks whereas same
tea is available for 10 rs and coffee for 15/20 rs
Suggested to target masses and common people,
instead of focusing on classes.
Products of other brands are flooded in the market
whereas we hardly see any tata consumer products
Suggested store on wheels.
Do we have Tie-ups with zomato and swiggy to
deliver products
What is penetration of products in tier1/2/3
cities?
Complained about the number of subsidiaries
Mr. Pranab ray
Take care of security measures as threat from
Pakistan came regarding our Taj hotel.
(Maybe his point is to take security measures in
general)
Suggested to reduce the price of Himalayan brand
products
Ashish Bansal- voice was not clear.
Aditi Tapuriah – asked for more visibility and
availability of the products.
(As Tata consumer brands are not seen flooded in
shelves of stores)
Sunita rocque- asked future product launches will
be for masses or classes?
Asif mody- impact on production of products.
Paritosh sharma
Strongly suggested for Eight o’clock to be launched
in India.
Vinay bhide raised queries regarding drop in ROCE
AND RONW percentages.
Also advised to launch ginger flavour in Tata tea
range with consultation to research department
Homayun pouredehi said she was not able to procure
Tata salt lite, and asked what reason like logistics is and asked if we are
outsourcing any products.
Berus pouredehi raised concern about poor dividend?
Asked about CSR expenditure figures.
Anil Champaklal Parekh
Raised Queries relating to:
Any plans to increase number of stores of Starbucks
in metros and tier1 cities.
Also what kind of revenue will be generated from
additional stake purchase of NourishCo from PepsiCo?
Asked why can’t we reach out in South Africa and Middle
East geographies and generate revenue from there.
Also Tata consumer products are not freely
available and suggested to open Tata special stores for its consumers.
It was almost 12: 30 p.m.
Apart from all these queries very few speakers spoked
regarding operations of the company.
Now I had stopped noting down points.
And directly coming to answers given by
management.
Chairman N. Chandrasekaran answered all queries of
shareholder to the best of his capacity.
Here are the
answers and insights given by Chairman.
Tata
consumer will get into more adjacent products and launch more products
Impact of
corona
50% outlets
are open
During March
and April difficulty was there in operation, but now demand levels are good and
operations are smooth
Normalcy has
reached in operating capacity of production
Suggestions
regarding merger of Tata coffee and opening of eight o’clock coffee will be
taken on the board.
(They will discuss topics and deliberations in
their meetings)
Ready to eat,
area we will look at
Tata cha: we
will look into it.
China import
: Very small
import not material likely not being affected by it.
Suggestion
regarding selling Atta, Sujji, Maida.
We will
study them and you will see them launching.
Looking at
expanding portfolio and address unattained markets (geographies)
Indian
business has better margin than other geographies.
Good year
for Starbucks 21% growth and 39 more stores opened. Confident and positive
regarding the business.
Have a lot
of tie ups to make sure online availability of products.
Many tie ups
are being done and more will be done
Biodegradable
material: definitely we will consider it as well
Company is committed
to sustainability as well.
Company will
take a conscious call to create a broader FMCG company immediate focus will be to
strengthen existing distribution of products.
There has
been impact of price change in Tea and it will be handled in a calibrated way.
Primary
focus is on food and beverages in FMCG
Not easy to
shut down subsidiaries. Evaluating each case. This process will continue.
Can we
deliver products on wheel? Already tie-up
with hyperlocal ecommerce players?
It will take
time to develop strategy and implement it.
Comments on ROCE
and RONW well taken, will work to improve on those numbers.
Launch of Tata
ginger, taken note off, it will be considered by the board.
How many new
stores will be opened can’t give you numbers right now.
Focus not to
get into new markets in South Africa and Middle East but strengthen our
presence in existing markets India, USA, UK.
Answering few more questions the meeting
concluded at 1:05 p.m.
My view: management gave very clear answers to the
questions asked by shareholder, in terms of corporate governance, disclosures,
communications with shareholders the company seems good.
Maybe due to this high standard of corporate
governance it is the most expensive FMCG stock in the market.
No doubt they have good corporate governance, but
when it comes to valuations opinion of people gets divided.
Code: TATACONSUM EPS: 4.03
Share
price: 405.85 (market close, 6th July) P/E: 98.47
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