Business Insights:

  1. The size of the tea market in India is estimated at ~INR250b (~USD3.5b). Tea is one of the oldest beverages in India with a penetration level of more than 90%.
  2. The branded tea category (i.e. sold in packages) represents ~65% of the total market with Tata Global and HUL having about 20% market share each in the branded category.
  3. RoIC (pre-tax) in the India tea business is strong at ~45-60%. But consolidated RoIC is lower at ~10%. The goodwill on various acquisitions over the years and weak performance in the overseas tea business is driving lower RoIC. It is noted that forex was also one the key reasons for increasing Goodwill over the year
  4. Excluding the goodwill on acquisition, TGB’s consolidated RoIC has ranged between 25-40% over FY11-19.

Disclaimer: The above report is compiled from information available on public platforms. inChat team advises users to check with certified experts before taking any investment decisions.

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