Guidance delivered, but tea inflation higher than expected

Revenue ₹5,348.9 Cr, +11.9% YoY, growth businesses +47%

PAT +28.8% to ₹427.2 Cr, EBITDA margin 13.6% (vs 12.9% prior year)

Delivered 70 bps expansion in Q1, reaffirming guidance for FY27

Tea volumes +2%, but revenue -4% as benefits passed to consumers

Combined growth 35% this quarter; management cautious (early days), targets 25-30% medium-term

Now 36% of India business, growing 47%, vs prior quarter's lower base. 25-30% medium-term growth norm reaffirmed with credible execution evidence.

Prior call implied 'benign tea costs', Q1 saw 7-10% inflation. Management sees peak cropping season just starting, planning for same 7-10% cost trajectory, will take pricing.

Core portfolio at 30% growth, margin now 12% (up 150-200 bps this quarter) vs -5% in 2020. New launches (dry fruits, cold-pressed oil) adding growth and margin upside.

Now in 'early days' of recovery with green shoots visible (40% growth, innovation + A&P + execution working). Go-to-market structure coming into place, targeting 25-30% norm.

11% reported growth (+7% CC), mid-single digit same-store sales vs prior year soft base. Guidance for high single-digit top-line going forward (moderating from prior exceptional growth).

Most growth businesses in-house or dedicated co-packers, capex not heavy. Inflation will be passed through with possible time lag. Sampann/growth categories improved margins this quarter despite inflation.

Early days, taking one quarter at a time. Innovation, A&P, execution starting to work. Go-to-market restructure (Feb relayout) still filling vacancies. Target 25-30% should be norm, not 35%.

Core (pulses, spices, poha) growing ~30% as guided. Dry fruits and cold-pressed oil added to that growth. Overall portfolio very happy.

Guidance remains mid-to-high single digits (5-7%). Price hikes take a quarter to settle. Touching 39% share, ambition to cross 40% quickly.

Seeing 7-10% inflation currently, planning for same. Peak cropping just started. Not calling a trend yet, will wait 15-30 days. Minor price increases taken in June, will take judicious pricing to maintain margins.

Will maintain double digit growth. Growth businesses have long runways (Sampann, RTD). Base comps don't matter as much because category-driven growth in tea/salt, runway in growth businesses.

Guided 50-70 bps expansion for year, delivered 70 bps YoY. Seasonality matters (tea peaks Q3/Q4, some businesses Q2/Q3 for festive). Compare to same quarter last year, not sequential. On track for 50-70 bps FY27.

India: inflation + A&P step-up + FX losses. International: US margin improving as coffee prices normalize. Different drivers, not divergence concern.

Stopped Nielsen disclosure (56% general trade, 16% modern trade, 1 major player doesn't share). From internal data, gained share. Mass premium & premium outperformed bottom end.

RTD (incl. water) grew 35% volume, 41% revenue. Water in line. Underestimated growth in some regions. Adding capacity next season, possibly early. Doubling down on execution.

Mix shift to higher-margin Capital Foods/Organic India; water margin improvement with utilization; premium RTD; Sampann margin expansion (now 12%, was -5% in 2020); operating leverage (headcount stable). Scale leverage expected.

Grew 45% this quarter. Significant launches coming in premium. Protein muesli launched, strong response. Muesli top category. Expansion into more categories next 3-6 months.

If sowing low, prices up, we take pricing. Sampann pulses ₹600-700 Cr vs ₹2.2L Cr pulses market (6% branded). Small share, room to grow. Ball in our court. For tea, if El Niño impact, will take pricing.

Q1 delivered 11.9%, management sees multiple growth drivers (growth businesses 30%+ long runway, Starbucks SSS + store openings, innovation pipeline). Will see quarters mid-teens and low double digits depending on comps.

Q1 delivered 70 bps expansion. Drivers: pricing actions on tea/salt (7-10% inflation seen), US coffee margin benefit as prices normalize, cost saving programs, operating leverage from stable headcount.

From current 13.5-14%. Drivers: mix shift to higher-margin growth businesses (Capital Foods/Organic India 50% gross margin), Sampann margin progression (12% now, improving), water utilization, operating leverage as business scales.

Most already in-house or dedicated co-packers. Will assess capex case for categories scaling (Sampann initially, water capacity additions). No major capex program telegraphed.

Tea inflation 7-10% currently vs prior 'benign' expectation. Salt, spices, dry fruits, cold-pressed oils all seeing cost pressure. Timing mismatch between cost hits and price realization compresses margins.

Growth businesses at 47% growth (Sampann +58%) implies high base for next year. Guidance for 25-30% medium-term suggests management expects normalization. If execution lags, significant compression possible.

Q1 11% growth came off a soft prior year base (Operation Sindoor closures May). Management guides high single digit going forward. Risk of 6-8% growth vs prior market expectations of 10%+.

Capital Foods/Organic India inflection just starting (green shoots visible). Go-to-market restructured Feb 2026, still filling distributor/DSR vacancies. Risk of slower scaling if execution falters.

Peak cropping season just starting. If El Niño continues to impact monsoon, crop quality/yield could be affected. Pricing power exists but lagged realization creates margin gap.