IDirect TataGlobalBeverages IC

Initiating Coverage
August 13, 2013

Rating Matrix
Tata Global Beverages (TATTEA)
Rating
Buy
Target
| 182
Target Period
12-15 months
Potential Upside
25%
Brewing it up the starry way.
YoY Growth (%)

(YoY Growth)
Net Sales
EBITDA
Net Profit
EPS (Rs)
FY13
10.7
23.3
4.7
16.1
FY14E
15.6
22.6
28.6
21.8
FY15E
10.6
12.7
14.5
14.5
FY16E
9.5
11.8
13.1
13.1
FY13
24.2
28.7
1.2
11.7
7.7
10.5
FY14E
18.8
22.3
1.1
9.9
9.3
12.2
FY15E
16.5
19.5
1.0
8.7
9.9
12.6
FY16E
14.5
17.2
0.9
7.6
10.4
12.9
Valuation Summary
P/E (x)
Target P/E
Mkt Cap/Sales (x)
EV/EBITDA (x)
RoNW (%)
RoCE (%)
Stock Data
Market Capitalization
Total Debt (FY13)
Cash and Investments (FY13)
EV
52 week H/L
Equity capital
Face value
MF Holding (%)
FII Holding (%)
| 9028.6 Crore
| 672.7 Crore
| 693 Crore
| 9008.3 Crore
179 / 124
| 61.8 Crore
|1
18.5
17.9
Comparative return matrix (%)

Return %
Tata Global Beverage
HUL
Nestle
1M
4.5
4.8
4.9
3M
(1.7)
7.7
10.0
6M
(0.3)
32.5
14.7
12M
12.6
31.5
23.1
Price movement
6,400
200
6,000
150
5,600
100
5,200
50
4,800
4,400
Aug-12
0
Nov-12
Feb-13
Price (R.H.S)
May-13
| 146
Aug-13
Nifty (L.H.S)
Analysts name
Sanjay Manyal
sanjay.manyal@icicisecurities.com
Parineeta Poddar
parineeta.poddar@icicisecurities.com
ICICI Securities Ltd | Retail Equity Research
Tata Global Beverages (TGBL) is the second largest branded tea player in
the world and the market leader in the domestic tea market with its
flagship brands, Tetley and Tata Tea, respectively. Apart from tea, TGBLs
increasing presence in the coffee and water businesses through
acquisition of dominant brands (Eight O Clock Coffee, Grand Coffee,
Himalayan water) has transformed the tea company into a good-for-youbeverages company. Further, we believe TGBLs JV with Starbucks Inc
US, to establish Starbucks stores across the country, and PepsiCo Ltd, to
handle distribution of its water products, are key positives for revenue
and earnings growth, going ahead. Accordingly, we expect revenues,
earnings (adjusted PAT) to grow at a higher CAGR (FY13-16E) of 12%,
15.7%, respectively. We initiate coverage on TGBL with a BUY rating.
Brand strength in tea to drive revenues across geographies
TGBL derives ~70% of its revenues (FY13) from tea. Tea revenues have
grown at a healthy CAGR of 9.2% in FY08-13. The growth has been aided
by its leadership position in Canada (Tetley), India (22.2% value share of
Tata Tea), UK (27% value share of Tetley), acquisition of leading brands
across the globe, Good Earth in US (20.6% volume share), Joekels in
South Africa (third largest player), Jemca in Czech Republic (market
leader) and Vitax in Poland (16% share of fruit tea market). Further,
capitalising on Tetleys brand strength TGBL has successfully ventured
into Australia and the Middle East. Therefore, we believe with a strong
portfolio of tea brands across geographies, TGBL would continue to grow
its tea revenues at reasonable CAGR of 7.6% in FY13-16E.
Strengthening coffee business to aid earnings
The coffee business contributes 35.8% (6.1% in FY06) to PBIT and 26.2%
(4.3% in FY06) to revenues (FY13). The increasing contribution of the
business has aided PBIT margins as earnings from the coffee business are
higher (15.2% in FY13) compared to tea (10.2% FY13). We expect coffees
contribution in revenues to increase to 29% by FY16E, consequently
driving margins (PBIT) growth, going ahead.
Earnings growth to gain traction, attractively valued
We expect TGBLs earnings (adjusted PAT) to witness a higher CAGR of
15.7% in FY13-16E led by changing sales mix, premiumisation across the
portfolio and Starbucks JV contributing positively to EBITDA from FY16E
onwards. We believe the stock is trading at an attractive P/E of 18.8x and
16.5x FY15E and FY16E EPS of | 8.9 and | 10, respectively. We have
valued the stock on an SOTP basis assigning it a target price of | 182.
Exhibit 1: Financial Performance
(Year-end March)
Total Operating Income
EBITDA
PAT (Adjusted)
EPS Adjusted (|)
EV/EBITDA (x)
Debt/Equity (x)
RoNW (%)
RoCE (%)
| crore
FY12
6,640.0
623.1
339.2
5.5
14.5
0.2
7.8
8.3
Source: Company, ICICIdirect.com Research
FY13
7,351.0
768.5
393.7
6.4
11.7
0.1
7.7
10.5
FY14E
8,498.4
942.4
479.3
7.8
9.9
0.2
9.3
12.2
FY15E
9,402.7
1,062.4
548.7
8.9
8.6
0.2
9.9
12.6
FY16E
10,292.0
1,187.4
620.7
10.0
7.5
0.2
10.4
12.9
Shareholding pattern (Q1FY14)

Shareholder
Company Background
Holding (%)
Promoters
35.2
Institutional Investors
36.4
Public
28.4
Tata Global Beverages (TGBL), formerly known as Tata Tea, was

established in 1983. The company is the market leader in the domestic
branded tea market (FY13) and a dominating player in the branded tea
and coffee in the markets of UK, US and Canada.
FII & DII holding trend (%)

30
25
20
15
10
5
0
25.2
15.4
23.2
16.5
TGBL entered the branded tea business in 1991 and has grown over the
years through acquisitions and joint ventures. Till date, the largest
acquisition for the company has been the European tea brand Tetley in
2000 for $450 million. The other major acquisitions by TGBL include tea
company Good Earth in the US (2005), Eight O Clock (EOC) coffee brand
in the US (2006) and coffee brand Grand in Russia (2009). Apart from tea
and coffee, the company has expanded its beverage offerings to the
mineral water business by investing in Mount Everest Mineral Water
Company (2007) that owns the Himalayan brand. With the diversification
in the product basket of Tata Tea, the company changed its name to Tata
Global Beverages in 2010 with the aim of establishing itself as a global
beverage company from a branded tea marketing company.
19.2
18.5
19.1
17.8
17.9 18.5
Q1FY13 Q2FY13 Q3FY13 Q4FY13 Q1FY14

FII DII
In November, 2010, TGBL entered into a 50:50 joint venture with PepsiCo
Ltd to develop, manufacture, sell and distribute hydration beverages
under the JV, NourishCo Beverages. Further, in 2012, TGBL entered into a
50:50 JV with Starbucks Coffee International Inc, US to set up Starbucks
coffee stores in India.
With successful acquisitions over the years, net revenues and earnings
(adjusted PAT) have grown at a CAGR (FY09-13) of 10.5% to | 7232.4
crore and 9.3% to | 400.9 crore, respectively. Gross revenues (| 7270.3
crore in FY13) consist of ~73% from tea, ~26% from coffee, ~1% from
water and other businesses. Geographically gross revenues (FY13) are
comprised of 31.8% from India, 21.3% from the UK, 27.4% from the US
and Canada and 19.5% from other countries (Poland, South Africa,
Australia, Czech Republic).
With the companys leading position across geographies and a strong
portfolio of brands, we expect revenues and earnings to post a CAGR of
12% and 15.7%, respectively, in FY13-16E.
Exhibit 2: TGBL's timeline
Tata enters into
alliance with James
Finlay to form Tata
Tata Tea enters
Finlay
brand business
1964 1988
Tata Tea is
born, James
Finlay is
bought out
1991
1993
Tata Tea
acquires the
Tetley
Group Ltd
2000
JV with Allied
Lysons Plc, Tata
Tetley is
established
Group acquires EOC, US &

energy water brand
Glaceau; Tetley group
acquires Jemca in Czech
Republic & 33% in Joekels
Tea, South Africa
2005
Tetley Group
acquires Good
Earth, US
2006
Integration of
beverages brands
announced; Group
acquires Grand
Coffee, Russia
2007
2009
Investments in Mount Everest

Mineral Water, which owns
Himalayan Water brand; Tetley
group acquires Polish tea brand
Vitax; Sells Glaceau to Coca Cola
Tata Global
Beverages
corporate brand
announced
2010
JV with Starbucks; Eight O'

Clock signs agreement with
Green Mountain Coffee
Roasters Inc
2011
2012
Acquires stake in The Rising

Beverage Co. LLC, which owns
Activate Brand; JV with
PepsiCo named NourishCo;
Increases stake in Joekels Tea
Page 2
Exhibit 3: TGBL structure
Tata Global Beverages (Holding Company)

Subsidiaries
Name
Tata Global Beverages (Standalone) - 100% stake
Brands
Segment
Tata Tea (Premium, Gold. Gold Darjelling) Tea
Tata Global Beverages Group Ltd. - 88.7% stake
Tata Coffee Ltd (57.48% stake)
Mount Everest Mineral Water Ltd. (50.1% stake)

Joint Ventures
Name
NourishCo Beverages (50:50) with PepsiCo
Tata Starbucks Ltd (50:50) with Starbucks Coffee Inc US
Tata Tea Agni
Tea
Tata Tea Chakra
Tea
Geography
India
Kanan Devan
Tea
Tetley
Tea
Joekels
Tea
South Africa
Good Earth
Tea
USA
Across the world
Jemca
Tea
Czech Republic
Vitax
Tea
Poland
Grand
Tea & Coffee
Russia
Tata Coffee
Plantation
India & Exports
Eight O' Clock Coffee
Coffee
USA
Activate
Functional Water
USA
Himalaya
Water
India
Brands
Tata Water Plus
Tata Gluco Plus
Starbucks (Coffee Retail)
Segment
Functional Water
Functional Water
Coffee
Country
India
India
India
Exhibit 4: Gross revenue (| 7270.3 crore in FY13) break-up by segment
Exhibit 5: Total operating revenue (| 7351 crore in FY13) by brands
Others
1%
Others
13%
Coffee
26%
Eight O' Clock

Coffee
17%
Tea
73%
Tetley
38%
India Tea
Brands
32%
Page 3
Investment Rationale
Revenue mix: Increasing contribution of coffee to aid revenue, PBIT growth
FY13 revenues (gross revenues of | 7270.3 crore) are comprised of 72.8%
from tea, 26.2% from coffee and 1% from other businesses (water and
joint ventures). Going ahead, by FY16E, we expect the contribution of tea
to decline to 64.8%, coffee to increase to 29% and others to increase to
6.2%. The higher contribution of coffee to revenues would be driven by
15.7% growth (CAGR in FY13-16E) in coffee revenues compared to 7.6%
growth (CAGR in FY13-16E) in tea revenues. The significant increase in
contribution of others to 6.2% by FY16E from 1% (FY13) would be aided
by revenues from joint ventures (largely Starbucks).
Exhibit 6: Revenue break-up: Contribution of coffee slated to increase from ~26% in FY13 to ~29% by FY16E
100%
134.4
157.5
664.8
(| crore)
895.4
1012.5
1299.3
1423.3
1706.4
1903.3
2503.5
2719.2
2944.9
3317.4
3407.0
3767.6
4381.8
4476.7
4766.8
5291.4
5639.7
6117.7
6588.0
FY07
FY08
FY09
FY10
FY11
FY12
FY13
FY14E
FY15E
FY16E
80%
60%
40%
2844.4
2930.0
20%
0%
FY05
FY06
Tea
Coffee
Others
The largest share in profitability (FY13 PBIT of | 807.8 crore) is accounted

by the tea segment at 67.4% with the share of coffee being 35.8%. The
others segments continue to remain under losses as they are in the
investment phase. With margins from the coffee business being higher at
~15% (FY13) compared to tea at ~10% (FY13) we believe the increasing
contribution of coffee to revenues would drive margins at a higher rate,
going ahead. Further, with the water business (Himalayan brand) turning
profitable in FY13 and JV businesses to achieve breakeven by FY16E, we
expect earnings (PBIT) to grow at a higher rate of 14.4% CAGR (FY13-16E)
against 6.6% CAGR (FY08-13).
The coffee segments increase in contribution to

revenues from 5.2% in FY05 to 26.2% in FY13 was aided
largely by the acquisition of the two large brands, Eight
O Clock Coffee in the US (2006) and Grand in Russia
(2009)
Exhibit 7: Segment wise contribution to PBIT (| crore)

100%
80%
148.8
Exhibit 8: PBIT margins from tea & coffee (%)

20
146.6
239.7
240.6
196.1
289.2
621.1
560.3
799.6
651.2
683.4
807.8
0%
FY08
FY09
FY10
Tea
Coffee
FY11
FY12
Others
FY13
16.9
10
15.2
14.5
11.5
13.9
11.8
13.1
9.4
20%
-20%
18.4
15
60%
40%
16.6
10.6
10.3
FY12
FY13
0
FY08
FY09
FY10
Tea
FY11
Coffee
Page 4
Tea: Growth to be supported by premiumisation and innovation

Revenues from tea stood at | 5291.4 crore (FY13) recording a CAGR of
9.2% in FY08-13. Going ahead, we expect tea revenues to grow at 7.6%
CAGR in FY13-16E driven by premiumisation in the domestic tea market
(12.6% CAGR FY13-16E), higher innovations driving growth in the UK
(4.1% CAGR in FY13-16E), capture of the evolving tea market of the US
(5.4% CAGR FY13-16E) and consolidation of market share in Poland,
South Africa, Czech Republic and Australia. Hence, we expect tea
revenues across geographies to be driven largely by prices
(premiumisation, innovations and change in sales mix) with volume
growth remaining modest.
Exhibit 9: Tea revenues (| crore) & growth trend
7000
6000
5000
4000
3000
2000
1000
0
3407.0
3767.6
4381.8
4476.7
4766.8
5291.4
5639.7
6117.7
6588.0
FY08
FY09
FY10
FY11
FY12
FY13
FY14E
FY15E
FY16E
Tea revenues
Exhibit 10: Tea portfolio

Brand
Good Earth
Acquired/Owned
Acquired
Year
October, 2005
Country
US
Value
$32 million
Remarks
20.6% volume market share; strong presence in West Coast
Joekels Tea
Acquired
October, 2006
South Africa
NA
Third largest player in South Africa; Its main brands are:

Laager, Tea Time Range, Tea4Kidz, San Aqua & Rooibos Ice
Tea
Jemca
Tata Tea
Acquired
Owned
May, 2006
1988
Czech Republic
India
NA
-
Market leader in Czech Republic

Market leader in India (volume and value); completed 25
years in FY13; Main brands include: Tata Tea Premium,
Agni, Chakra, Gemini, Kanan Devan
Tetley
Acquired
Feburary, 2000
UK, Canada, Australia, US, etc
$450 million
Vitax
Acquired
2007
Poland
NA
Second largest tea brand globally; market leader in Canada;

brand leader in decaffinated tea in UK
16% share of the fruit tea market of Poland
Among the basket of TGBLs tea brands, we believe ~54% of tea

revenues and ~38% of TGBLs consolidated revenues are constituted by
Tetley (Tetley revenues in FY13 estimated at ~| 2800 crore). We believe
with the global presence of Tetley, it would continue to be the dominant
contributor to revenues.
Page 5
Exhibit 11: Share in revenues by brands
The largest brand in the companys consolidated

revenues (FY13) has been Tetley contributing ~38%
followed by the Indian tea brands (Tata Tea) contributing
~32%. This, we believe, is supported by the global
presence of Tetley
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
24.0%
22.5%
26.0%
29.0%
29.0%
30.0%
20.6%
27.8%
30.0%
29.0%
30.0%
32.0%
51.6%
45.9%
40.0%
39.0%
40.0%
38.0%
FY08
FY09
FY10
FY11
FY12
FY13
Tetley
Indian Tea Brands
Others

*Others in FY12 & FY13 contain contribution of Jemca, Vitax, Coffee and water brands
Others (FY08-11) depicts contribution of coffee and water brands
According to geographic break-up of tea revenues (FY13), we estimate

that currently India is the highest contributor with ~44% (| 2273.3 crore),
followed by the UK at ~27% (~| 1400 crore), US & Canada at ~15%
(~| 800 crore) and ~14% (~| 700 crore) from Australia, Czech Republic,
Poland, Russia and South Africa.
With highest growth in tea revenues expected from India we expect
Indias dominance in TGBLs tea revenues to increase to 49.3% by FY16E.
We expect the share of the UK to decline to 24% by FY16E due to the
deceleration in the black tea market in the UK and specialty tea driving
UKs tea revenue growth. The share of the US and Canada would also fall
to 14% by FY16E as we believe the shift of coffee drinking consumers to
tea would remain slower compared to the higher rate of change in sales
mix in India.
India: Market leadership, premiumisation to drive growth!
TGBLs Volume market Share

22
20
18.5
19.2 18.9 18.9
18 16.7
19.7 19.5
19.6 19.6 19.9
20.3 20.5
18.6
Achieved mkt leadership and has
maintained it since then
16
Q4FY13
Q3FY13
Q2FY13
FY12
Q1FY13
Q3FY12
Q2FY12
Q1FY12
FY10
Q2FY11
FY07
Q1FY08
FY06
14

TGBL is the market leader of the Indian branded tea market (~450
million kg by volume) with a share of 20.5% by volume and 22.2%
by value (FY13).
Tea revenues in India have grown at a CAGR of 15% in FY08-13 posting

sales of | 2273.3 crore in FY13. Going ahead, we believe that with TGBLs
market leadership in the domestic branded tea market, strong marketing
strategies (Jaago Re! campaigns) in the country and increasing sales of
green and specialty teas (Tetley offerings), tea revenues would grow at a
healthy CAGR of 12.6% (FY13-16E) to | 3246 crore by FY16E. Our
assumption is based on the premise that TGBL would maintain its current
volume leadership in the domestic tea market until FY16E. Therefore, any
incremental gains would further aid the companys revenues.
We estimate that currently (FY13), black tea constitutes ~94% (| 2131.2
crore) of TGBLs Indian tea revenues, green tea constitutes ~5% (| 102.3
crore) and specialty tea constitutes ~1% (| 39.8 crore). With the growing
demand for green and specialty tea in the country, we expect black teas
contribution in the countrys tea revenues to fall to ~91% (| 2970.1 crore
clocking ~12% CAGR in FY13-16E), green teas contribution to increase to
~6% (| 194.8 crore growing at ~24% CAGR in FY13-16E) and specialty
teas contribution to increase to ~3% (| 81.2 crore at ~27% CAGR in
FY13-16E).
Further, the higher contribution of specialty teas would also drive higher
realisation/kg and increase the contribution of tea bag sales in the sales
mix, supporting realisations.
Page 6
Exhibit 12: Growth in domestic tea revenues driven by price increases, marketing campaigns & TGBLs market leadership position
3500
3000
Launched
Jaago Re!
campaign
Strong growth in
Premium, Gold &
Agni post Jaago Re!
19.9%
2000
1132.2
1686.8
Second Jaago Re!

campaign
3246.0
30%
2908.6
25%
2602.5
2273.3
20%
1991.5
1777.6
15%
1357.9
12.0%
5.4%
1000
500
Significant price increases

taken in FY09 & FY10 impact
growth
24.2%
2500
1500
Price increases
taken in FY09
support growth
(| crore)
14.5%
14.1%
11.8%
10%
11.6%
5%
7.6%
0%
FY08
FY09
FY10
FY11
FY12
Sales (| core)
FY13
FY14E
FY15E
FY16E
% Increase
Exhibit 13: Domestic tea brands portfolio

TGBLs India portfolio has brands across the value pyramid
The share of domestic tea brands in consolidated revenues
has increased from 20.6% in FY08 to 32% in FY13
TGBL has recently launched the Tetley brands in India

largely in the tea bags format. The company has guided that
it is witnessing ~50% YoY growth in Tetleys offerings
The growth expected in the tea industry in India at ~15%

per annum would have a higher contribution of prices (led
largely by premiumisation) than volumes. We believe the
Brand
Tata Tea Premium
Tata Tea Gold
Tata Tea Gold Darjelling*
Chakra Gold
Tata Tea Life
Tata Tea Agni
Gemini
Kanan Devan
Segment
Premium
Premium
Premium
Premium
Popular
Economy
Economy
Economy
Price (|/kg)
336
396
90
420
348
250
NA
213
Tetley Variants
Black
Green
Flavoured
higher growth of 20.9% CAGR expected in tea bags

consumption would significantly aid margins of tea
companies
Comparison of revenues from loose tea vs. tea

bags (Brand: Tata Tea Premium)
Loose Tea
Tea Bags (2 gms/pag)
Price
335
95
Grams
1000
200
Hence, revenues from sale of 1000 gm of tea bags would

be | 475 crore, ~42% higher from the sale of same amount
of loose tea. Hence, an increase in the sales of tea bags
would aid margins significantly, going ahead
Remarks
Flaghip brand; Volume leader in India
Fastest growing brand in the portfolio
Premium tea launched as tea bags
Leading brand in Andhra Pradesh
Nearest competitor of unbranded players
Market Leader in Andhra Pradesh
Leading brand in Kerala
Flavors
Assam Tea
Plain, Long Leaf, Ginger Mint & Lemon, Lemon
& Honey
Masala, Lemon, Ginger, Elaichi, Tulsi &
Lemon, Earl Grey

*It is the price of tea bags, 25 nos (~50 grams)
Indian tea market: A snapshot

India is currently a tea drinking nation (black tea) with ~870 million kg of
annual consumption (CY12, Source: Tea Board of India). The market is
equally dominated by branded (~50% of the consumption demand) as
well as unbranded players. The penetration of the commodity is very high
(~95%). Hence, demand growth for branded players is largely led by
capturing the share of unbranded players and growth in varieties
(specialty tea, green tea) other than black tea.
Exhibit 14: Facts about domestic tea industry
Tea Industry Size (| crore)-2011
Tea Industry Size (| crore)-2015E
Growth (p.a.)
Tea Bag Consumption In India in 2011 (tonnes/year)
Tea Bag Consumption In India in 2015E (tonnes/year)
Growth in the flavored tea market (p.a.)
19500
33000
15%
7000
15000
25%
Source: Assocham, ICICIdirect.com Research
Page 7
United Kingdom: Innovation key to growth
Tea drinkers comprise ~88% of the population above 65

years of age and 73% among 15-34 year olds in the UK
Revenues from the UK are dominated by its largest tea brand Tetley.
Tetley is the market leader having ~27% share by value (CY12). We
estimate that tea revenues from the UK in FY13 stood at ~| 1400 crore
(~90% of total UK revenues in FY13) growing at 5.6% in FY08-13E. We
expect tea revenues from the UK to grow at a CAGR of 4.1% in FY13-16E
to | 1577.9 crore (FY16E). We believe growth in UK tea revenues will be
driven by a change in the product mix and increasing contribution of
premium offerings (Kenyan Tea, Red Bush, Specialty Tea and Herbal
Infusions). Further, the constant innovation and new offerings by TGBL in
the UK through increased marketing initiatives would be key in keeping
growth intact in UK markets in spite of a slowing black tea market.
Hence, we estimate sales growth in UKs tea revenues will be supported
by highest growth in green tea (~25% CAGR FY13-16E) and a moderate
growth in fruit & herbal tea and instant tea at ~5% CAGR in FY13-16E. The
growth in black tea would remain subdued at ~3% CAGR in FY13-16E.
Exhibit 15: Estimated UK sales (Tetley)
TGBL entered the UK market with the acquisition of the worlds
1500
(| crore)
Slowdown in black tea sales,

Premium & Specialty tea to support
sales growth
CAGR 4.1%
second largest and UKs largest tea brand Tetley in February,
CAGR 5.6%
2000. TGBL had acquired the brand for $420 million. Due to the
global presence of the brand, the acquisition had actually provided
1000
TGBL an entry into 70 countries across the globe
500
952
1018
1164
1059
1166
1252
1286
1365
1441
FY08E
FY09E
FY10E
FY11E
FY12E
FY13E
FY14E
FY15E
FY16E

We have assumed that ~80% of TGBLs UK revenues are generated by Tetley Sales
Exhibit 16: Tetley's offerings in UK market

Tea Variant
Black
Green
The number of tea variants along with the equally higher

number of flavours shows that TGBL has identified the
opportunity in the specialty tea segment in UK. We believe the
TGBLs continued innovation in the fruit & herbal tea segment
would keep the companys leadership position intact in the UK
market, going ahead
Green & Black

Kenyan Tea
Redbush
Speciality
Herbal Infusions
Flavors
Original & Decaf
Extra Strong
Easy Squeeze
Pure & Decag
Lemon Green
Honey Green
Blueberry Green
Blend of both
Estate Selection
Pure
Vanilla
Earl Grey
Peppermint
Camomile
Remarks
Black tea is sourced from Africa and India (Assam) and blended
together; Black tea consumption is witnessing slowdown in
consumption
Green tea acquired from Asia and Africa is blended together. Green
tea market in UK is growing faster than the specialty tea and black
tea. Higher contribution of green tea is also aiding the margin
improvement.
Unique blend of black tea from Africa and India (Assam) with green
tea from Asia.
Launched in Q4FY13 it is a premium Kenyan tea
Redbush from South Africa is available originally as well as with
vanilla
It is present in original and with vanilla flavour
Herbal infusions are tea infused with herbal benefits
Page 8
UK tea market: An overview

Similar to India, the UK is largely a tea consuming nation having high
penetration (~87% as in 2011) of the beverage. However, unlike India the
UK market is largely branded with unbranded and private players having
only 5% share. Majority of the tea consumed in the UK is black tea (~80%
of total tea consumed in 2011). Specialty tea, green tea and fruit & herbal
tea form a smaller share in the overall tea consumption but are growing at
a higher rate than the black tea market.
Therefore, the key to grow and consolidate market share in the UK is
through innovation and new launches. TGBL has successfully capitalised
on this opportunity by launching a number of variants within existing
varieties year after year. Further, TGBL has also launched products in the
super premium categories to aid its revenue and profitability growth in
the UK.
US & Canada: Strength of TGBL in Canada yet to spread to US
Tea revenues in the US are accounted by Tetley and Good Earth Tea
(acquired in 2007) and in Canada by Tetley. We estimate that out of the
total revenues of | 1993.7 crore (FY13) from the US & Canada, ~45% is
constituted by tea sales (| 788.3 crore). Tea revenues from the US &
Canada have grown at a CAGR of 3.5% in FY08-13E, which we expect to
increase at a higher rate of 5.4% CAGR in FY13-16E. The higher rate of
increase from tea sales is expected on the back of new premium launches
(Pure Ceylon tea, premium variant, launched in Canada in FY13) and
higher demand for specialty tea.
Exhibit 17: Tea sales in CAA
1000
900
800
700
600
500
400
300
200
100
0
(| crore)
Premium launches in Canada and Australia
Significant increase led

by launch of liquid
infusions & additional
flavours in Canada
749.5
679.9
652.9
718.2
772.1
818.4
843.0
601.3
572.0
61.1
72.7
57.8
59.8
65.5
70.1
74.3
78.0
80.4
FY08E
FY09E
FY10E
FY11E
FY12E
FY13E
FY14E
FY15E
FY16E
Good Earth Sales
Tetley Sales
US
The US is largely a coffee consuming nation (coffee consumption in the
US is 9.39 lb/person compared to tea consumption of 0.9 lb/person in
2011). However, the consumption rate of coffee is declining (by volumes)
with tea sales catching up at a fast rate. According to the Tea Association
of America, the tea market in the US has grown from $1.8 billion in 1991
to $8.2 billion in 2011 (CAGR of ~7.9%). It is expected to grow at a higher
rate from here on with the sharpest growth expected in green tea.
Therefore, specialty tea driving tea demand in the US, TGBLs presence in
the segment through Good Earth (a speciality tea brand largely present
in the West Coast) and increasing foray through Tetley would drive
revenues to grow at 4.7% CAGR in FY13-16E against 2.8% CAGR in FY0813E.
Page 9
Exhibit 18: TGBL's offerings in US
Drivers of the US tea market are refrigerated tea and ready

to drink tea. Total ~85% of the tea consumed in the US is
iced tea
Tetley Variants
Classic Blend
British Blend
Pure Green
Iced Tea
Flavors
Original & Decaf
Premium Black & Decaf
Original& Decaf
Original & Decaf
Good Earth Variants

Original Tea
Super Fruit White Tea
Green Tea
Flavors
Sweet & Spicy
Mangosteen & Mango
Lemon Grass Plain & Decaf, Matcha, Sencha & Orange,
Jasmine, Gingseng Citrus, Mango Peach & Pineapple
Plain, Decaf, Vanilla, Cocoa & Seven Spice
Sweetly twisted, Cocoa Tango, Tropical Peach, English
Breakfast, Earl Grey & Apricot Ginger
Vanilla, Vanilla decaf, Citrus
For Cold, Sleep & Slimming
Chai Teas
Black Tea
White Tea
Medicinal Teas
Canada:
Tetley is the volume leader in Canada with ~39% share by volume and
~31% share by value (Euromonitor). The tea market in Canada was
estimated to be $415 million in 2011 and is estimated to increase to $541
million by 2017 (CAGR 4.5%). The Canadian market is largely dominated
by black tea consumption by volume (76.6% volume market share in
2012) and specialty tea consumption by value (~60% of value market
share in FY12).
With the black tea market attaining saturation in Canada, specialty tea is
the growth driver fuelled by more consumption of specialty black (up
27% YoY in 2012) and fruit & herbal (up 11% YoY in 2012) teas.
Hence, led by Tetleys market leadership in Canada, innovation in the
black tea category (orange pekoe along with flavours introduced in the
portfolio, offering alternatives to black tea consumers) and strengthening
green, fruit and herbal tea portfolio, (Tetley Green Tea Plus and Herbal
Cocktail-Inspired Teas launched in 2012), we expect tea revenues from
Canada to grow at 5.5% CAGR in FY13-16E against 3.6% CAGR in FY0813E. The higher contribution of specialty teas would drive the higher
revenue growth while we expect volume growth to remain modest.
Further, TGBLs launch of its domestic tea brand Tata Tea in Canada in
H1CY13 to meet the demands of the large Indian population residing
there would further aid black tea revenues from Canada.
Exhibit 19: TGBL's offerings in Canada
Tea Variant
Black/Orange Pekoe
Green
Green tea plus

Herbal
Flavoured Black
Rooibos
Flavors
Original, Decaf, Bold & Ceylon
Pure, Decaf, Earl Grey,Honey Lemon/Mint/Pomegranate,
Jasmine, Lyshee Pear, Passion Fruit Acai, Blueberry Green
Aware, Glow, Figure
Cammomile Mint - Calm, Blueberry Ginseng - Clarity,lemon
balm & honey - Cleanse,Cammomile Lemon - Dream, Mint
Lime - Mojito, Pure Peppermint
Chai, Dark Chocolate, Vanilla, Earl Grey, Camommile
Plain, Vanilla, Red Berry, Spice Plum
Page 10
Other geographies: Strengthening regional presence

TGBL has ventured into geographies across the world by acquiring tea
brands in the respective geography and introducing Tetley brands and
flavours in these tea drinking nations.
Exhibit 20: TGBLs brands in other geographies
Geography
Poland
South Africa
Russia
Czech Republic
Brand
Vitax
Joekels
Grand Tea
Jemca
Remarks
Vitax has ~16% share of the fruit & herbal tea market in Poland
Offers products under the name 'Laager", 2nd largest brand in South Africa
Offers flavoured, green and iced tea variants.
Market Leader with 20.6% volume share, Available in Black, Green and Fruit &
Herbal teas
Tea revenues from these geographies are estimated to be | 711.9 crore

(FY13) accounting for ~14% of tea revenues. Going ahead, we expect the
contribution to tea revenues from these brands to remain at ~13% until
FY16E, supported by a CAGR of 5.7% (FY13-16E) clocking revenues of
~| 840 crore by FY16E.
Therefore, tea revenue growth of 7.6% CAGR in FY13-16E would be
driven by higher growth in specialty tea across all geographies driving
revenues primarily through prices. Riding on Tetleys brand strength and
ability to blend new flavours across all categories of tea (black, green and
fruit & herbal tea) we believe innovation and premium offerings would
further support the growth in tea revenues.
Exhibit 21: Snapshot of tea revenues across geographies
Tea revenues
% Increase
India
Contribution %
UK
Contribution %
USA & Canada
Contribution %
Others
Contribution %
FY13E
5291.4
11.0%
2273.3
43.0%
1399.7
26.5%
788.3
14.9%
711.9
13.5%
FY14E
5639.7
6.6%
2602.5
46.1%
1427.7
25.3%
846.4
15.0%
763.2
13.5%
FY15E
6117.7
8.5%
2908.6
47.5%
1505.2
24.6%
896.4
14.7%
807.4
13.2%
(| crore)
FY16E
6588.0
7.7%
3246.0
49.3%
1577.9
24.0%
923.3
14.0%
840.7
12.8%
CAGR FY13-16E
7.6%
12.6%
4.1%
5.4%
5.7%
Page 11
Coffee: Increasing share in portfolio to aid earnings

TGBLs coffee business revenues include plantation revenues and sale of
branded coffee. Coffee revenues have grown at 16.3% CAGR in FY08-13
to | 1903.3 crore (FY13). Consequently, the segments contribution has
increased from 20.5% (| 895.4 crore) of consolidated sales in FY08 to
26.2% (| 1903.3 crore) in FY13. Going ahead, we expect the segment to
grow at 15.7% CAGR (FY13-16E) to | 2944.9 crore (FY16E) and its share in
overall revenues to increase to 29%. We expect the higher growth rate to
be contributed by the premiumisation in the coffee markets in the US,
consolidating market share in Russia and higher realisations from
supplying to Starbucks stores in India (currently) and international
markets, going ahead.
TGBL is scouting for international acquisitions for its coffee business and
planning to increase its Indian capacity further. We believe these would
account for incremental contribution to revenues from the segment,
going ahead.
Exhibit 22: Coffee revenues (| crore) trend
2000
1600
1200
800
400
Tie up witn K-cups
Grand
relaunched
Acquired
Grand in
Russia
1299.3
Acquired
EOC in USA
1903.3
1706.4
895.4
1423.3
1012.5
664.8
157.5
134.4
FY05
FY06
0
FY07
FY08
FY09
FY10
FY11
FY12
FY13
Exhibit 23: Coffee portfolio

Brand
Grand
Eight O' Clock
Mr Bean
Coorg Pure
Coorg Filter Coffee
Mysore Gold
Tata Caf
Tata Kaapi
Acquired/Owned
Acquired
Year
Sept, 2009
Country
Russia
Acquired
Owned
Owned
Owned
July, 2006
NA
NA
NA
USA
India, Russia and Middle East
India
India (South)
Owned
Owned
Owned
NA
NA
NA
India, Russia & Ukraine

India
India
Value
NA
$220 million
NA
NA
NA
NA
NA
NA
Remarks
Market Leader in Russia with Grand Prado, Grand Gold & Grand Cocoa
Third largest coffee brand by volume in the US
The brand is largely exported to Middle East countries
100% pure filter coffee
Chain of 35 outlets offering consumers in Tamil Nadu & other states
fresh, roast and ground coffee
It is a popular brand sold largely in South India
Pure instant coffee
India's No. 3 Coffee Chicory Brand
Page 12
Exhibit 24: Coffee revenues by brands (| crore)

100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
675.9
802.0
139.1
237.9
307.9
375.9
961.2
914.5
1040.5
1099.3
218.1
210.5
199.1
270.8
358.1
428.0
FY08
FY09
FY10
FY11
FY12
FY13
Tata Coffee Std
EOC
Others
Tata Coffee
Tata Coffee (TCL) is a 58% subsidiary of Tata Global Beverages. TCL is the
largest integrated coffee player in India and the third largest exporter of
instant coffee. The company produces ~10000 MT of both Arabica as well
as Robusta coffee through its 19 coffee estates (~8000 hectares) in South
India. TCLs revenues by FY13 (| 428 crore) have witnessed a CAGR of
14.4% in FY08-13. We expect this to increase to | 770.8 crore by FY16E
with growth at 21.7% CAGR in FY13-16E. The higher revenues would be
supported by higher curing operations as well as supply to Starbucks
stores across India (currently) and Starbucks stores across Asia (in future).
Apart from coffee, TCL is also engaged in the plantation of tea and other
agricultural products (cardamom and pepper). Revenues from these
stood at | 146.7 crore (25.5% of FY13 revenues). Going ahead, we expect
revenues from these products to grow at a modest CAGR of 7.4% (FY1316E) against 11.7% (FY08-13) as the companys focus would remain on its
dominant business, coffee.
Exhibit 25: TCLs revenues from coffee (LHS) and standalone revenues (LHS) in | crore
1000
800
~60% increase in
instant coffee
volumes
914
777
600
400
200
301
218
312
211
327
199
401
271
489
358
574
428
653
771
638
521
0
FY08
-200
Dip in sales
volumes
FY09
FY10
FY11
Coffee Revenues-Std
FY12
FY13
TCL Standalone
FY14E
FY15E
FY16E
40
35
30
25
20
15
10
5
0
-5
-10
% Increase in coffee revenues
Page 13
Following the holding companys JV with Starbucks Inc, US, TCL has set
up a special roasting facility in Kushalnagar (~2000 MT operational since
FY13) to cater exclusively to the requirements of the Tata Starbucks
stores setup across the country and South East Asia. The roastery would
be utilising the beans produced in TCLs estates. We believe this pact
would provide incremental sales volume as well as better realisation,
going ahead. TCL is also expanding its Theni facility in Tamil Nadu for
instant coffee to meet the higher export demand.
Further, TCL expanded its portfolio outside India and entered the US
market through the acquisition of Eight O Clock Coffee in July, 2006.
Eight O Clock Coffee
Eight O Clock Coffee (EOC) was acquired by TGBL, though its subsidiary
TCL in July, 2006 extending the companys coffee portfolio to the
international branded coffee market.
EOC is the fourth largest coffee brand by volume in the US with sales of
| 1099.3 crore (FY13). Revenues have grown at a CAGR of 10.2% in FY0813 led largely by prices. Volume growth has remained grim on the back of
slowing coffee consumption in the US. Going ahead, we expect revenue
growth in EOC to moderate to 4.2% CAGR in FY13-16E as we believe
further increase in prices would be tough and could impact volume
growth.
In FY11, sales were impacted significantly by a substantial increase in
prices by the company, which impacted volume growth. The price
increase was on the back of an increase in Arabica coffee prices (~36%
YoY), the key raw material. As coffee prices started declining from FY12
onwards, sales growth has revived for EOC.
Exhibit 26: EOC sales (| crore)
1500
Sales growth was led by prices and

positive impact of forex translation.
1200
Coffee prices (Brazilian Real/60 kg)
900
600
961.2
802.0
25
1040.5
1099.3
1154.2
1200.4
1242.4
20
914.5
15
675.9
600
10
300
500
400
300
0
Mar-12
Mar-11
Mar-10
Mar-09
Mar-08
200
0
FY08
FY09
FY10
FY12
FY13
-300
FY14E
FY15E
FY16E
-5
EOC
Source: Bloomberg
1 USD = 2.2991 Brazilian Real; 1 USD = 61.1 INR
FY11
% Increase
Page 14
Exhibit 27: EOC's product portfolio in US

Coffee type
Medium to Dark Roast
Formats
Original, Colombian, French Roast, Italian Dark Roast
Reduced Caffeine
EOC Metabolism Boost
Decaf Original, 50% decaf

Metabolism Boost
Flavours
Hazel Nut, French Vanilla
& Mocha
Coffee pods are pre-packaged ground coffee beans in their

own filter.
K-Cup portion packs are used with Keurig or other single
cup brewing systems to brew a cup of coffee, tea, or hot
chocolate. Each K-Cup is a plastic container with a coffee
filter inside. Ground coffee beans are packed in the K-Cup
and sealed air-tight with a combination plastic and foil lid.
When the K-Cup is placed in a Keurig brewer, the brewer
punctures the foil lid and the bottom of the K-Cup and
forces hot water under pressure through the K-Cup and into
a mug. (Source: Wikipedia)
With the US coffee market moving towards the single serve PODS
consumption (~18% of US coffee market is constituted by PODS), EOC
tied up with Keurig in FY12 and launched EOC K-cups version. In spite of
K-cups contributing positively to the brands growth, EOC has been
witnessing an overall stress in volume growth (adjusting with our without
PODS sales) keeping the revenue growth lower at 5.7% in FY13. Going
ahead, though the company plans to invest significantly behind its brands
and launch more variants in the coffee segment, we estimate moderate
sales growth of 4.2% CAGR FY13-16E, as we believe EOC does not have
pricing power in the US coffee market. Further, with any uptick in coffee
prices, passing on the higher input cost through prices impacts EOCs
volume growth. Therefore, driven by the high vulnerability to coffee
prices we remain wary of EOCs growth.
Exhibit 28: Facts about US coffee consumption
Highest specialty coffee drinkers are the 25-45 years old

citizens
Total US coffee sales (2012)

Sales by food services
Retail Sales
Speciality coffee sales (% of retail sales)
Growth of Speciality coffee sales (YoY)
Per Capita Coffee consumption (2011) in kg
$59 billion
87%
13%
30%
20%
6.22
Source: http://www.ncausa.org/i4a/pages/Index.cfm?pageID=731; Euromonitor ; ICICIdirect.com Research
Exhibit 29: Slowing coffee consumption volumes in US (in 000 bags)

22500
With the US coffee market being saturated and traditional
22044
22000
coffee consumption taking a back seat, similar to Indias tea
21500
market, we believe the growth would largely come from

higher gourmet coffee consumption
21000
21652
21783
21436
21033
20998
20667
20500
20000
19500
2005
2006
2007
2008
2009
2010
2011
Source: http://blog.euromonitor.com/2012/06/us-pod-coffee-market-poised-for-further-expansion.html,
ICICIdirect.com Research
The US is the largest coffee consuming nation with ~83% of the adults
drinking coffee (CY12). Though the overall consumption in the US
remains high, growth in consumption is being driven by gourmet coffee
beverages. Traditional coffee consumption has declined from 56% (CY11)
to 49% (CY12). Hence, with EOCs portfolio largely consisting of premium
coffee, we believe value growth would remain at ~4% CAGR in FY13-16E.
However, a revival in volume growth could only come through market
share gains, which would involve huge expenditure behind the brands
keeping the companys margins from EOC under stress.
Page 15
Grand
Grand is the fourth largest player in the Russian instant coffee market. It
was acquired by TGBL in September, 2008. Grand coffee was re-launched
in 2010 by introducing large amount of flavours and varieties.
Russia is relatively a smaller market for TGBL (I-direct estimate: ~| 230
crore coffee revenues in FY13) currently. The annual per capita coffee
consumption in Russia is very low at 0.7 kg compared to ~6 kg in
Germany and ~7 kg in the US. However, coffee consumption in Russia is
gaining strength albeit slowly. We believe that in order to establish itself
in the under penetrated Russian market, TGBL needs to improve its
presence in Russia and achieve greater market share to accelerate its
revenues.
Hence, we believe TGBLs coffee revenue growth of 15.7% CAGR in FY1316E would be driven mostly by higher sales volume and realisation from
Indias plantation revenues (21.6% CAGR from FY13-16E). The growth in
the US coffee market, however, would remain modest at 4.2% CAGR in
FY13-16E and would be largely driven by increasing specialty coffee sales
growth in traditional coffee remaining strained.
Exhibit 30: TGBL's coffee revenues (| crore)
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
237.9
307.9
375.9
914.5
1040.5
1099.3
270.8
358.1
FY11
FY12
828.3
880.8
931.7
1154.2
1200.4
1242.4
428.0
521.0
638.0
770.8
FY13
FY14E
FY15E
FY16E
Coffee Revenues-Std
EOC
Others
Page 16
Water: Building strength in under penetrated category

Water accounts for less than 1% of TGBLs revenues, currently. Revenues
from water are accounted by Himalayan, Tata Water Plus, Tata Gluco Plus
and Activate. The sales and marketing of TGBLs water brands are carried
out through NourishCo Beverages (50:50 joint venture between PepsiCo
and TGBL), which helps the company to capitalise on PepsiCos
distribution channel.
Mineral water segment in India (| crore)
4000
3000
Brand
Himalaya
Type of Water
Mineral Water
Geography
India
Remarks
TGBL has acquired the brand by acquiring
50.07% stake in Mount Everest Mineral
Water Limited
Tata Water Plus
Fortified Water
India
Brand was introduced in FY13 and is

marketed in Tamil Nadu and Andhra
Pradesh
Tata Gluco Plus
Glucose Water
India
Activate
Vitamin Water
USA
Launched in FY13. Available in 3 flavours Lemon, Orange & Mango

TGBL has acquired this brand by investing
in a small start up company in USA in
FY13.
CAGR 19%
2000
1000
Exhibit 31: Water portfolio
1500
1800
FY08
FY09
2200
2400
FY10
FY11
3000
0
FY12
Source: MEMW, Annual Report
Revenues from Mount Everest Mineral Water (MEMW), (Himalayan brand)

stood at | 22 crore in FY13. TGBL also supplies Himalayan to Starbucks
coffee outlets in India. We believe that though the branded mineral water
segment in India (~| 1200 crore in FY12 with penetration of ~10%,
Source: MEMW Annual Report) remains small currently, the segment has
huge potential led by the growing out of home dining culture. Further,
TGBLs JV with Starbucks provides further volume growth opportunity as
the JV provides for supply of Himalayan mineral water to Starbucks
stores globally. Hence, we estimate the sales CAGR (FY13-16E) of 18.2%
for MEMW to | 36.4 crore by FY16E.
Exhibit 32: MEMW revenues (| crore) trend
40
We expect the sales growth to accelerate as supplies to
Starbucks stores increase
35
CAGR
18.2%
30
25
36.4
20
15
22.8
22.0
20.1
21.2
18.9
FY08
FY09
FY10
FY11
FY12
22.0
24.8
30.0
10
FY13
FY14E
FY15E
FY16E
Apart from the mineral water segment, TGBL has entered the fortified
water segment in FY13 through the launch of Tata Water Plus and Tata
Gluco Plus. The company has launched these only in South Indian
markets (Tamil Nadu and Andhra Pradesh) currently and is yet to launch it
nationally. We believe the entry of TGBL into the functional water
segment would yield results at a very slow pace as the segment is a niche
concept and very small in India currently.
Page 17
Joint ventures to yield long term benefits

Starbucks JV: MaStar stroke by TGBL!
TGBL entered into a 50:50 joint venture with Starbucks Coffee
International Inc US, in FY12, to set up, own and operate Starbucks cafs
across the country. The cafs will be branded as Starbucks Coffee A
Tata Alliance. The JV has also provided that all Starbucks stores in India
would source the coffee from Tata Coffee Ltd (TCL, subsidiary of TGBL).
TCL would also be supplying coffee to Starbucks stores in South East
Asia, going ahead.
Starbucks currently (Q1FY14) owns and operates 18 stores, nine in
Mumbai and nine in Delhi. The stores are located in prime locations of the
country and are spread over an area of 1500-4000 sq ft. With the
company expanding its presence at a rapid pace, we expect TGBL to
open ~42 stores by FY14E and ~92 stores by FY16E. Led by the brand
strength of Starbucks across the globe and evolving caf culture in the
country, we expect the JV to achieve breakeven (EBITDA level) by FY16E.
Exhibit 33: Starbucks store in Mumbai
Exhibit 34: Starbucks store in Delhi
NourishCo JV: Establishing itself in segments of tomorrow

TGBL has formed a 50:50 JV with PepsiCo Inc US, to handle the sales,
marketing and distribution of Himalayan Natural mineral water and other
water products capitalising on PepsiCos distribution network. We believe
that though the fortified water segment is a niche and small category in
India currently, it is one of the highest growing beverage categories in the
US and other international markets. Hence, with TGBLs early entry into
the segment and partnering with giants like PepsiCo to benefit from their
distribution network, the company would reap long term benefits.
NourishCos portfolio comprises Himalayan, Tata Water Plus (pet/pouch
packets) and Tata Gluco Plus as in FY13.
Page 18
Significant innovation to drive slowing growth

With black tea being a highly penetrated beverage in India (~95%) and
UK (~80%) and traditional coffee witnessing deceleration in growth in the
US, we believe it is innovation (more variants and flavours) within these
segments that would be the key revenue drivers for TGBL. Apart from
aiding revenue growth, these innovations would provide support to
margins also as they fall into the premium category of the value chain.
The ease of innovation for TGBL would be helped by the companys
strong brand equity across geographies where it is present (Tetley
second largest tea brand globally, Tata Tea market leader in India,
Jemca - market leader in Czech Republic, EOC- strong presence in the
US) and cross-selling of its brands and variants across geographies.
For example, Tata Tea has successfully launched Tetley in India under the
specialty and green tea segment and is witnessing ~50% YoY growth in
these brands. Further, with a large Indian population in Canada, TGBL has
launched the Tata Tea brand in Canada, which would further aid its
revenues from the country.
Hence, we believe that with TGBLs vast portfolio of brands, ability to
innovate and blend new flavours across beverages and launch them
across the world markets, revenues would register 12.0% CAGR in FY1316E against 10.6% CAGR in FY08-13. Moreover, the shifting consumption
towards specialty and gourmet tea and coffee would also improve
margins from 10.5% in FY13 to 11.5% by FY16E.
Exhibit 35: Innovations in TGBLs portfolio in FY12 & FY13 alone
Brand
Tetley
The company is launching around four variants and flavours

across geographies every six months, garnering every bit of
the evolving market opportunity across tea and coffee
EOC
Grand
Tata Tea
Tata Waters
New Launchs
Blend of both
Estate Selection
Green Tea Plus
Herbal mocktails
Tetley Tassimo single serve discs
Chai Latte
Specialty Tea
Tata Tea Gold
Green Tea Mango and Passion Fruit
k-cups
Chocolate mint
Grand Melange
Grand Extra
Veda
Tata Water Plus
Tata Gluco Plus
Geography
Uk
UK
Canada
Canada
Canada
Australia
Australia
Pakistan
Across the globe
USA
USA
Russia
Russia
India
India
India
Year
FY13
FY13
FY13
FY13
FY13
FY13
FY13
FY13
FY13
FY13
FY13
FY13
FY12
FY12
FY12
FY12
Page 19
Financials
Revenues to grow at higher CAGR of 12.0% in FY13-16E
Revenues have grown at a CAGR of 10.6% in FY08-13. We expect this to
increase to 12.0% in FY13-16E. The increase would be driven by changing
sales mix of tea (higher contribution of tea bags in domestic tea revenues,
increasing contribution of specialty teas in Canada & UK markets),
increasing innovations and launches in the premium tea categories,
higher coffee revenues from TCL and increasing revenues from joint
ventures. We estimate the tea revenues will grow at 7.6% CAGR in FY1316E compared to 9.2% in FY08-13. Coffee revenues are expected to
maintain a high growth rate of 15.7% CAGR (FY13-16E) compared to
16.3% CAGR (FY08-13).
Exhibit 36: Revenues (| crore) and revenue growth (YoY in %)
12000
10000
8000
6000
4367.1
4848.9
5783.9
5983.9
6552.8
7233.3
8624.0
9690.9
10808.1
25
20
15
10
4000
2000
0
0
FY08
FY09
FY10
FY11
FY12
Revenues
FY13
FY14E
FY15E
FY16E
% increase
Margins to improve to 11.5% by FY16E

EBITDA growth has remained strained at 1.5% CAGR in FY08-13 with
margins falling from 16.2% in FY08 to 10.5% in FY13. The fall in margins
was led by the significant increase in tea prices, which has increased the
raw material cost to sales ratio from 32.4% in FY08 to 49.3% in FY13. We
believe that though tea prices would continue to remain high, the change
in sales mix and higher coffee revenues (higher margins segment) would
mitigate the impact, improving margins to 11.5% by FY16E. We believe
the JV business would start contributing to margins positively from FY16E
onwards.
Exhibit 37: EBITDA (| crore) and margins (% to sales)
1289.0
1400
1118.1
1200
1000
800
945.9
712.7
648.5
724.4
610.6
623.1
FY11
FY12
768.5
600
400
200
0
FY08
FY09
FY10
EBITDA (| crore)
FY13
FY14E
FY15E
18
16
14
12
10
8
6
4
2
0
FY16E
EBITDA Margins (%)
Page 20
Reduction in interest cost, healthy margins to aid PAT growth

TGBL witnessed a loss in FY08 and FY09 on the back of higher interest
cost and tax expense. In FY10, the company reduced its debt through the
sale of Glaceau to Coca Cola (at a profit of $523 million), which reduced
its interest cost and improved its profitability from thereon. We believe
that with margins expected to improve from FY13 onwards and net debt
on books being nil, TGBLs earnings (adjusted PAT) would increase at an
impressive rate of 15.7% CAGR in FY13-16E.
Exhibit 38: Profit before tax (PBT), adjusted PAT and interest cost (| crore) trend
1400
1200
1072.4
200
917.2
1000
800
250
1230.9
658.2
600
580.1
652.8
749.4
538.1
374.2
400
621.5
244.8
333.6
517.3
628.5
754.2
400.9
100
200
50
0
-200
150
FY08
-79.8
FY09
-29.8
FY10
FY11
PBIT
FY12
Adjusted PAT
FY13
FY14E
FY15E
FY16E
Interest Cost
Strong balance sheet

Debt in FY13 stood at | 672.7 crore against cash of | 693 crore on the
books. Hence, the net debt of the company is (| 20.3) crore. The debt to
equity ratio (FY13) is at a comfortable level of 0.1x compared to 0.8x in
FY08. The company has not paid its debt as it is seeking acquisitions.
Hence, we believe the strong balance sheet of the company would
provide it with greater flexibility to grow through the inorganic route,
without straining its balance sheet and maintaining a comfortable debt to
equity ratio, going ahead.
Exhibit 39: Debt-equity ratio trend
1
0.75
0.67
1
1
0.48
1
0
0
0
0.18
0.16
0.14
0.15
0.15
0.16
FY11
FY12
FY13
FY14E
FY15E
FY16E
0
0
FY08
FY09
FY10
Page 21
Return ratios to improve with healthy earnings growth

TGBLs return ratios (on adjusted PAT) have improved over the years
aided by improvement in earnings and reduction in debt. FY08 and FY09
reported net adjusted loss due to higher interest cost and consequent
increase in debt, straining the RoE. In FY10, with the reduction in debt and
improvement in earnings, the company witnessed a comeback in its RoE
to 10%. With earnings set to witness higher growth (PBIT at 15.5% and
adjusted PAT at 15.7% CAGR FY13-16E), going ahead, and no significant
increase in debt, we expect the RoE (adjusted) and RoCE to improve to
11.2% and 13.4%, respectively by FY16E.
Exhibit 40: Return on equity and return on capital employed (%)
16
14
12
10
8
6
4
2
0
-2
-4
FY07
FY08
FY09
FY10
FY11
FY12
RoE (adjusted)
FY13
FY14E
FY15E
FY16E
RoCE
Exhibit 41: Return on capital employed from tea & coffee (%)
25
20
15
10
5
0
FY08
FY09
FY10
FY11
Tea
FY12
FY13
Coffee
Page 22
Risks & Concerns

Slowdown in black tea market across geographies
Black tea is witnessing a slowdown in consumption across key
consumption geographies (India, UK). Though consumption is shifting
towards specialty black tea and green tea, the rate of shift could be lower.
Further, due to the premium pricing in specialty tea, we believe volume
growth could remain lower.
Input costs susceptible to higher commodity prices

With TGBLs business largely being marketing of branded tea and coffee,
the company is susceptible to price fluctuations in tea and coffee. The
significant increase in domestic tea prices in FY13 (~24% increase YoY)
increased TGBLs (standalone) RM cost to 66.4% (higher by ~200 bps),
consequently pulling down margins by 110 bps to 10.3%. Similarly, in
FY11, EOC sales de-grew ~5% YoY due to price increases taken by TGBL
in order to pass on the increase in coffee prices (higher by ~36% YoY in
FY11). Therefore, led by the due nature of TGBLs business, commodity
price concerns would continue to haunt TGBLs revenues and margins.
Higher brand building expenses may keep margins strained

TGBL has been witnessing increasing competition across geographies,
which has kept the companys marketing expenses higher over the years.
Marketing expenses have witnessed an increase of 7.9% CAGR in FY0813 ranging between 18% and 21% of net sales. We believe that with TGBL
increasing brand building expenditure in the US (EOC), Russia (Grand)
and Poland (Vitax) to increase market share and in India (water business)
and UK (Tetleys premium launches) to drive market growth, its marketing
spends would increase at a higher CAGR of 9.3% from FY13-16E (18-19%
of net sales). Though we expect margins to improve ~100 bps to 11.5%
by FY16E in spite of higher marketing expense, we remain wary of the
fact that any further increase in competition could drive marketing
expenses higher, pulling down margins.
Goodwill in balance sheet

TGBL has a goodwill of | 3598.1 crore (FY13) on its books. The goodwill
has been accumulated on account of the various acquisitions by the
company over the years. We believe a possible impairment of this
goodwill remains a key risk if the acquired brands fail to generate the
expected growth.
Slowdown in Starbucks store addition to impact sales growth

We have estimated the higher revenue growth in TCLs coffee business to
be supported by higher supplies to Starbucks stores in India. Further, the
growth in revenues of the others segment (102.8% FY13-16) of TGBL
would constitute 80-90% revenues from sales through Starbucks stores.
We have estimated that the company would open ~95 stores by FY16E.
Hence, any slowdown or a significant downtrend in stores addition would
adversely impact the revenue growth estimate for TCL and TGBL.
Page 23
Valuation
We have valued TGBL on a sum of parts (SOTP) valuation methodology
and arrived at a fair value of | 182/share. We have divided the overall
business into four sub parts, TGBL (standalone), Tata Coffee
(consolidated), Mount Everest Mineral Water and Tata Global (other
subsidiaries). With Tata Coffee and MEMW being listed subsidiaries in
India, we have valued them individually and assigned the contribution of
each proportionately to TGBLs share price.
Exhibit 42: SOTP Valuation
TGBL (Standalone)
Sales FY15E
Multiple
2914.8
2.0
Mcap
5829.6
Propotionate Mcap
5829.6
No. of Shares
61.8
Value/share
94.3
Tata Coffee (Consolidated)

EBITDA FY15E
EBITDA Multiple
EV
Debt (FY15E)
374.2
5.0
1870.8
125.1
Cash (FY15E)
15.4
Target Mcap
1761.1
Propotionate Mcap (57.5% Stake)
1012.3
No. of Shares
61.8
Value/share
16.4
MEMW
Current Market Cap
458.9
Discount (%)
25%
Mcap (FY15E)
344.2
TGBL's propotionate
172.3
No. of shares
61.8
Value/share
2.8
TGBL (other subsidiaries)

Sales FY15E
4362.5
Multiple
Mcap
4798.7
Propotionate Mcap
4254.1
No. of Shares
61.8
Value/share
68.8
Target Price
182.2
Page 24
EV/EBITDA Valuation
Over the past eight years, TGBL has traded in the average range of 8-10x
two year forward EV/EBITDA multiple. At the CMP, it is trading at lower
band of its historic range at 8.6x FY15E EBITDA/share. At the target price
of | 182, the two-year forward multiple would be 10.2x FY15E
EBITDA/share. We believe the increase in multiple would be on account
of improving margins led by change in product mix in both tea and coffee
and reduction in the losses from the JV businesses.
EV
10x
8x
6x
Apr-13
Dec-12
Aug-12
Apr-12
Dec-11
Aug-11
Apr-11
Dec-10
Aug-10
Apr-10
Dec-09
Aug-09
Apr-09
Dec-08
Aug-08
Apr-08
Dec-07
Aug-07
Apr-07
Dec-06
Aug-06
Apr-06
Dec-05
Aug-05
14,000
12,000
10,000
8,000
6,000
4,000
2,000
0
Apr-05
EV (Rs Cr)
Exhibit 43: Two-year forward EV/EBITDA
4x
Price to sales valuation

At the CMP of | 146, the stock is trading at 1x its FY15E and 0.9x its FY16E
sales per share of | 150 and | 164.4, respectively. At our target price of
| 182, the two-year forward multiple would be 1.1x its FY15E price/sales.
The increase in multiple would be supported by the increasing
contribution of specialty and premium tea in the companys portfolio and
higher revenues from the coffee segment.
Exhibit 44: Market capitalisation to sales ratio (two years forward)
200
160
120
80
40
Close (|)
0.8x
1x
1.2x
Apr-13
Oct-12
Apr-12
Oct-11
Apr-11
Oct-10
Apr-10
Oct-09
Apr-09
Oct-08
Apr-08
Oct-07
Apr-07
Oct-06
Apr-06
Oct-05
Apr-05
1.4x
Page 25
Price/earnings valuation
At the CMP of |146, the stock is trading at 16.4x its FY15E and 14.6x its
FY16E EPS of | 8.9 and | 10, respectively. Historically, the stock has
traded in the range of 12-18x its two-year forward earnings. At the
assigned target price of | 182, the two year forward P/E multiple would be
18.2x FY15E EPS.
Exhibit 45: Price/earnings ratio (two years forward)
200
160
120
80
40
Close (|)
12x
14x
16x
Apr-13
Dec-12
Aug-12
Apr-12
Dec-11
Aug-11
Apr-11
Dec-10
Aug-10
Apr-10
Dec-09
Aug-09
Apr-09
Dec-08
Aug-08
Apr-08
18x
Page 26
Tables
Exhibit 46: Profit & Loss Account (Consolidated)
(| Crore)
(Year-end March)
Net Sales
Other Operating Income
Total Operating Income
FY12
6,551.1
89.0
6,640.0
FY13
7,232.4
118.6
7,351.0
FY14E
8,375.5
122.9
8,498.4
FY15E
9,276.6
126.2
9,402.7
FY16E
10,163.4
128.6
10,292.0
Raw Material Expenses

Power & Fuel
Manufacturing Expenses
Employee Expenses
Marketing Expenses
Administrative Expenses
Miscellaneous Expenses
Total Operating Expenditure
EBITDA
Interest
Other Income
PBDT
Depreciation
Less: Exceptional Items
PBT
Total Tax
PAT before MI
Minority Interest
PAT after MI
Adjusted PAT
EPS (Adjusted)
3,321.3
79.6
124.5
681.3
1,217.9
293.0
299.3
6,017.0
623.1
70.4
94.5
647.2
96.1
(22.5)
573.6
141.7
431.9
60.7
371.3
339.2
5.5
3,567.0
85.2
136.2
740.1
1,387.1
304.9
361.9
6,582.5
768.5
84.4
86.0
770.1
105.1
28.2
636.8
164.1
472.7
72.3
400.4
393.7
6.4
4,050.8
100.5
146.6
845.9
1,608.1
376.9
427.2
7,556.0
942.4
85.0
85.3
942.7
117.2
825.6
247.7
577.9
72.3
505.6
479.3
7.8
4,469.6
104.4
167.0
941.6
1,734.7
440.6
482.4
8,340.3
1,062.4
91.6
88.4
1,059.1
136.3
922.8
276.8
646.0
72.3
573.7
548.7
8.9
4,927.4
111.8
167.7
1,041.7
1,809.1
508.2
538.7
9,104.6
1,187.4
97.3
90.2
1,180.4
156.5
1,024.0
307.2
716.8
72.3
644.5
620.7
10.0
Page 27
Exhibit 47: Balance Sheet (Consolidated)

(| Crore)
(Year-end March)
Equity Capital
Reserve and Surplus
Total Shareholders funds
LT Borrowings
Total Debt
Deferred Tax Liability
Minority Interest
Other Non Current Liabilities
LT Provisions
Total Liabilities
FY12
61.8
4,503.9
4,565.8
739.3
739.3
65.7
1,065.9
155.8
174.0
6,766.5
FY13
61.8
4,748.3
4,810.2
672.7
672.7
54.0
813.9
92.4
203.2
6,646.3
FY14E
61.8
5,070.1
5,131.9
772.7
772.7
54.0
886.2
92.4
203.2
7,140.4
FY15E
61.8
5,461.2
5,523.1
872.7
872.7
54.0
958.5
92.4
203.2
7,703.8
FY16E
61.8
5,924.4
5,986.3
972.7
972.7
54.0
1,030.8
92.4
203.2
8,339.3
Total Gross Block

Less Total Accumulated Depreciation
Net Block
Total CWIP
Total Fixed Assets
Other Investments
5,233.9
988.0
4,246.0
49.2
4,295.1
473.5
5,508.1
1,069.0
4,439.1
90.7
4,529.7
576.0
5,858.1
1,186.2
4,671.9
150.2
4,822.1
626.0
6,058.1
1,322.5
4,735.6
100.2
4,835.7
676.0
6,258.1
1,478.9
4,779.1
100.2
4,879.3
726.0
Inventory
Debtors
Loans and Advances
Other Current Assets
Cash
Current Investments
Total Current Assets
1,160.7
651.8
734.4
17.1
731.6
93.0
3,388.6
-
1,382.9
712.9
792.4
21.3
693.0
1.9
3,604.5
-
1,528.3
821.5
795.7
25.1
429.2
1.7
3,601.4
-
1,702.8
914.9
881.3
27.8
709.2
1.9
4,238.0
-
1,893.5
1,002.4
965.5
30.5
1,016.6
2.0
4,910.5
-
Creditors
Provisions
ST Borrowings
Other CL
Total Current Liabilities
Net Current Assets
LT Loans & Advances
Other Non CA
Total Assets
805.2
263.6
148.9
294.6
1,512.3
1,876.3
88.3
33.3
6,766.5
803.4
310.0
344.1
690.2
2,147.6
1,456.9
83.6
6,646.3
917.9
321.3
418.8
335.0
1,992.9
1,608.5
83.8
7,140.4
965.8
338.0
463.8
371.1
2,138.7
2,099.3
92.8
7,703.8
1,002.4
350.8
467.5
457.4
2,278.1
2,632.4
101.6
8,339.3
Page 28
Exhibit 48: Cash Flow Statement (Consolidated)

(| Crore)
(Year-end March)
Profit after Tax
Add: Depreciation
Add: Interest Paid
CF before WC changes
Changes in inventory
Changes in debtors
Changes in loans & advances
Changes in other CA
Changes in Current Investments
Net Increase in CA
Change in creditors
Change in provisions
Change in ST borrowings
Changes in other CL
Net Increase in CL
Net CF from operations
Change in LT loans & advances
Change in Non CA
Change in other investments
Change in FA
Change in deferred tax liability
Change in minority interest
Change in other non CL
Change in LT provisions
Net CF from Investing activities
Proceeds from Equity Capital
FY12
356.2
96.1
70.4
522.7
(91.1)
(78.6)
(108.0)
(3.6)
13.5
(267.7)
(24.8)
3.9
(149.6)
22.5
(148.1)
106.9
2.8
(29.1)
6.4
(588.7)
2.0
(42.2)
(8.2)
85.7
(571.3)
0.1
FY13
372.8
105.1
84.4
562.3
(222.2)
(61.1)
(58.1)
(4.2)
91.1
(254.5)
(1.9)
46.4
195.2
395.6
635.3
943.1
4.6
33.3
(102.5)
(339.7)
(11.8)
(252.0)
(63.4)
29.2
(702.2)
-
FY14E
479.3
117.2
85.0
681.5
(145.3)
(108.6)
(3.3)
(3.8)
0.2
(260.7)
114.5
11.3
74.6
(355.1)
(154.7)
266.0
(0.1)
(50.0)
(409.5)
72.3
(387.3)
-
FY15E
548.7
136.3
91.6
776.7
(174.6)
(93.5)
(85.6)
(2.7)
(0.2)
(356.5)
47.9
16.8
45.1
36.0
145.8
565.9
(9.0)
(50.0)
(150.0)
72.3
(136.7)
-
FY16E
620.7
156.5
97.3
874.5
(190.6)
(87.5)
(84.2)
(2.7)
(0.2)
(365.2)
36.6
12.8
3.7
86.3
139.4
648.7
(8.9)
(50.0)
(200.0)
72.3
(186.6)
-
Proceeds from LT borrowings

Payment of dividends
Interest Paid
Adj in General Reserve
Adj in Revaluation reserve
Adj in Statutory Reserve
Acturial Gain/(Loss) Reserve
Exchange Rate Fluctuation
Contingency Reserve
Net CF from Financing activities
16.5
(157.0)
(70.4)
7.1
(2.3)
(70.7)
465.1
10.2
198.6
(66.6)
(157.5)
(84.4)
0.3
1.4
(0.3)
(27.0)
30.9
23.8
(279.5)
100.0
(157.6)
(85.0)
(142.6)
100.0
(157.6)
(91.6)
(149.2)
100.0
(157.6)
(97.3)
(154.8)
Net Cash Flow

Opening Cash
Closing Cash
(265.7)
997.3
731.6
(38.6)
731.6
693.0
(263.8)
693.0
429.2
280.0
429.2
709.2
307.3
709.2
1,016.6
Page 29
Exhibit 49: Ratio Analysis

(Year-end March)
Per Share Data
EPS
Cash EPS
Cash per Share
Revenue per Share
Operating profit per share
DPS
FY12
FY13
FY14E
FY15E
FY16E
5.8
7.3
11.8
105.9
10.1
2.1
6.0
7.7
11.2
117.0
12.4
2.1
7.8
9.6
6.9
135.4
15.2
2.2
8.9
11.1
11.5
150.0
17.2
2.2
10.0
12.6
16.4
164.4
19.2
2.2
Operating Ratios
EBITDA / Total Operating Income
PAT / Net Sales
9.4
5.4
10.5
5.2
11.1
5.7
11.3
5.9
11.5
6.1
Return Ratios
RoE
RoCE
RoIC
RoA
7.8
8.3
8.9
5.3
7.7
10.5
11.3
5.6
9.3
12.2
12.5
6.7
9.9
12.6
13.4
7.1
10.4
12.9
14.3
7.4
25.3
30.0
1.4
1.6
14.5
1.4
1.5
24.2
28.7
1.2
1.5
11.7
1.2
1.5
18.8
22.3
1.1
1.3
9.9
1.1
1.5
16.5
19.5
1.0
1.2
8.7
1.0
1.5
14.5
17.2
0.9
1.1
7.6
0.9
1.5
0.2
7.5
2.2
1.5
-
0.1
7.9
1.7
1.0
-
0.2
9.7
1.8
1.0
-
0.2
10.1
2.0
1.2
-
0.2
10.6
2.2
1.3
-
Turnover Ratios
Asset turnover
Debtors Turnover Ratio
1.0
10.1
1.1
10.1
1.2
10.2
1.2
10.1
1.3
10.1
Creditors Turnover Ratio

Inventory Turnover
8.1
5.9
9.0
5.7
9.1
5.8
9.6
5.7
10.1
5.7
Valuation Ratios
P/E
Target P/E
Market Cap / Sales
Target Market Cap / Sales
EV / EBITDA
EV / Net Sales
Dividend yield
Solvency Ratios
Debt / Equity
Interest coverage
Current Ratio
Quick Ratio
Page 30
RATING RATIONALE
ICICIdirect.com endeavours to provide objective opinions and recommendations. ICICIdirect.com assigns

ratings to its stocks according to their notional target price vs. current market price and then categorises them
as Strong Buy, Buy, Hold and Sell. The performance horizon is two years unless specified and the notional
target price is defined as the analysts' valuation for a stock.
Strong Buy: >15%/20% for large caps/midcaps, respectively, with high conviction;
Buy: > 10%/ 15% for large caps/midcaps, respectively;
Hold: Up to +/-10%;
Sell: -10% or more;
Pankaj Pandey
Head Research
pankaj.pandey@icicisecurities.com
ICICIdirect.com Research Desk,

ICICI Securities Limited,
1st Floor, Akruti Trade Centre,
Road No. 7, MIDC,
Andheri (East)
Mumbai 400 093
research@icicidirect.com
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Initiating Coverage

August 13, 2013

Tata Global Beverages (TATTEA)

Brewing it up the starry way.

YoY Growth (%)

Comparative return matrix (%)

ICICI Securities Ltd | Retail Equity Research

Source: Company, ICICIdirect.com Research

Shareholding pattern (Q1FY14)

Tata Global Beverages (TGBL), formerly known as Tata Tea, was

FII & DII holding trend (%)

Q1FY13 Q2FY13 Q3FY13 Q4FY13 Q1FY14

Group acquires EOC, US &

Investments in Mount Everest

JV with Starbucks; Eight O'

Acquires stake in The Rising

Source: Company, ICICIdirect.com Research

ICICI Securities Ltd | Retail Equity Research

Exhibit 3: TGBL structure

Tata Global Beverages (Holding Company)

Tata Global Beverages Group Ltd. - 88.7% stake

Tata Coffee Ltd (57.48% stake)

Mount Everest Mineral Water Ltd. (50.1% stake)

Tata Tea Agni

Tata Tea Chakra

Across the world

Tea & Coffee

India & Exports

Eight O' Clock Coffee

Source: Company, ICICIdirect.com Research

Exhibit 4: Gross revenue (| 7270.3 crore in FY13) break-up by segment

Exhibit 5: Total operating revenue (| 7351 crore in FY13) by brands

Eight O' Clock

Source: Company, ICICIdirect.com Research

ICICI Securities Ltd | Retail Equity Research

Source: Company, ICICIdirect.com Research

Source: Company, ICICIdirect.com Research

The largest share in profitability (FY13 PBIT of | 807.8 crore) is accounted

The coffee segments increase in contribution to

Exhibit 7: Segment wise contribution to PBIT (| crore)

Exhibit 8: PBIT margins from tea & coffee (%)

Source: Company, ICICIdirect.com Research

ICICI Securities Ltd | Retail Equity Research

Source: Company, ICICIdirect.com Research

Tea: Growth to be supported by premiumisation and innovation

Source: Company, ICICIdirect.com Research

Exhibit 10: Tea portfolio

Third largest player in South Africa; Its main brands are:

Market leader in Czech Republic

UK, Canada, Australia, US, etc

Second largest tea brand globally; market leader in Canada;

Source: Company, ICICIdirect.com Research

Among the basket of TGBLs tea brands, we believe ~54% of tea

ICICI Securities Ltd | Retail Equity Research

Exhibit 11: Share in revenues by brands

The largest brand in the companys consolidated

Indian Tea Brands

Source: Company, ICICIdirect.com Research

According to geographic break-up of tea revenues (FY13), we estimate

TGBLs Volume market Share

19.2 18.9 18.9

19.6 19.6 19.9

Source: Company, ICICIdirect.com Research

Tea revenues in India have grown at a CAGR of 15% in FY08-13 posting