Tata Global Beverages to exit loss-making subsidiaries

The company, however, would have to maintain subsidiaries in certain locations, owing to legal issues, Chairman N Chandrasekaran told shareholders at the annual general meeting here. 

“The whole idea is to have subsidiaries which can be scaled up and are profitable,” he said. “It is important to pick up growth rate and grow profitably. Growth in the domestic market is required. 

Mix of product portfolio is critical and is going to be a big focus for us,” Chandrasekaran said. The growth, he said, could be either organic or inorganic. Tata Global Beverages’ market share in the domestic tea market was 20 per cent, while it was three to four per cent for coffee. The company would make an investment of Rs 150 crore in addition to the ongoing capex of Rs 300 crore, he said.        

Regarding the Tata Starbucks outlets, he said each store takes two to three years to achieve break even, but the coffee chain as a corporation had already achieved the same. 

In his speech to the shareholders, Chandrasekaran said the company posted a flat revenue growth of 1 pc in the last fiscal. Referring to international markets, he said growth continued to suffer due to marginal presence in many overseas countries. Even though in volume terms, it continued to be “number one” in the Indian market, the same was not true in value terms, he said.

Manwhile, PB Balaji, CFO, Tata Motors Group, said “Jaguar Land Rover and Tata Motors have always maintained that the uncertainties from Brexit are avoidable and the business seeks clarity to ensure that industry takes timely and right decisions to manage the transition. Also, JLR needs free and full access to the single market beyond transition to remain competitive which we believe is in UK’s longterm interests.”