Tata Consumer Products on track to open 1,000 Starbucks stores in India by FY28
The coffee business has begun to recover, with same-store sales growth improving from a low double-digit negative at the start of FY25 to flat by the end of FY25, MD and CEO Sunil D'Souza said
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Tata Consumer Products is on track to achieving its ambitious target of opening 1,000 Starbucks stores in India by fiscal year 2027-28, MD and CEO Sunil D'Souza said.
According to CNBC TV18 news channel, D'Souza said, "We remain focused on the long-term guidance of 1,000 outlets by the fiscal year 2027-28, which doesn't change. We remain committed to that. It is just that we will calibrate depending on market conditions".
The coffee business has begun to recover, with same-store sales growth improving from a low double-digit negative at the start of FY25 to flat by the end of FY25, the company's chairman added.
"Same-store sales growth was low double-digit negative when we started off in the fiscal year 2024-25. By the time we exited the quarter, we were touching a distance of zero on same-store sales growth. We had tempered outlets a bit, but we remain confident of hitting the 1,000 outlets by the fiscal year 2027-28," D'Souza said.
Tata Consumer Products reported its Q4 FY25 result this week. The net profit jumped 59% to Rs 345 crore year-on-year, aided by double-digit growth in India's food and beverages business, which contributes nearly 70 percent of its topline.
The consolidated revenue for the March quarter rose 17% to Rs 4608 crore.
D'Souza said that it was a good quarter for the company, ahead of expectations.
"This quarter, we have every single business growing on revenue as well—17% topline, 12% organic. Earnings before interest, taxes, depreciation, and amortisation (EBITDA) margins were a bit soft, and if you look at it, overall EBITDA was negative 1.1".
D'Souza attributed the primary compression to tea prices, which have run up 25 to 30%.
On the FY26 outlook, he said the FMCG giant will take calibrated price increases. However, as the new crop came in, he anticipated the tea prices would decline, improving margin.
On the international businesses, D'Souza said that the UK business performed remarkably well.
"We are the number two tea business now in the UK and on a very strong margin profile and overall structural balance".
However, the US business was a bit topsy-turvy with the coffee prices, etc.
Overall, "the international business—the good part was, for the full year, we delivered a 5% topline and a 21% EBIT growth. And broadly, the business is back on track," he added.
