Tata Global Beverages ICICI Direct Research

TataTAT Global Beverages (TATGLO)

CMP: | 390 Target: | 450 (15%) Target Period: 12 months BUY

February 5, 2020 Profitability boost led by India volumes, high margins Particulars

Consolidated sales increased 2.6% YoY to | 1,961.9 crore, mainly driven by Particulars (| crore) Amount 20% growth in the non-branded business. The tea business reported muted

Market Capitalization 24,612.9 growth of 2% whereas the coffee business declined 4%. On the volume Total Debt (FY19) 1,116.9 front, the India tea business reported healthy growth of 7%. Operating Cash and Investments (FY19) 1,616.8 margins expanded 195 bps to 12.2%, benefitted by benign commodity costs EV 24,113.0

and control over operating overheads. PAT increased 24.8% YoY to | 135.9 52 week H/L (|) 407 / 178 crore on account of higher operating profit, lower tax rate and better Equity capital 92.2 performance from associate and JVs on a YoY basis. Face value (|) 1.0 Update Result

India volumes, non-branded business aid growth momentum Key Highlights India tea volume and revenue growth was 7% and 6%, respectively, led by  US coffee business declines 3% with strong double-digit growth in Tata Tea Agni, Spice Mix and robust growth 2% volume de-growth due to higher in Tata Tea Premium. EBITDA margins improved 96 bps YoY to 13.8% on promotion spends and increased account of favourable commodity prices. We expect 7% revenue CAGR over competitive intensity FY19-22E driven by market share gains, inorganic growth initiatives and premiumisation. We expect margins to stabilise at 14-15% led by cost saving  Other international businesses (UK, initiatives and premiumisation strategy. On the other hand, non-branded Canada) saw 1% volume de-growth business witnessed strong 20% growth during the quarter primarily led by due to decline in sales of regular tea 25% YoY growth in Tata Coffee. Volumes grew 14% during the quarter on account of commencement of the Vietnam facility. The company realised  Starbucks store count is at 174

higher profitability in the Tata Coffee segment due to higher volumes and (opened 28 new stores in Q3FY20) exceptional gain on account of one-time credit.  Reiterate BUY recommendation with International businesses continues to remain sluggish target price of | 450 The US coffee business witnessed volume de-growth of 2% with underlying revenue de-growth of 3% on account of higher promotional spend and Research Analyst increased competitive intensity in Eight O’ Clock. However, K-cups and Sanjay Manyal private label coffee segments witnessed some volume growth during the [email protected] quarter. The UK witnessed flat revenue growth impacted by a decline in the

black tea market. It has started facing growth challenges in the green tea Kapil Jagasia, CFA

[email protected] Research Equity Retail

category as well in the UK market. The Canada market saw 5% revenue

– growth driven by higher black tea & speciality tea sales and new launches. Tetley Cold Infusions and Tetley black tea were able to maintain 23% and 29% growth in UK and Canada, respectively. TGBL is focusing on improving

its product mix in favour of speciality & herbal teas and has been incurring higher media spends towards new launches in the category. This should help reverse the slump in revenue growth in international markets. Valuation & Outlook

ICICI Securities Securities ICICI TGBL’s India business revenue contribution has increased from the previous 47% in FY19 to ~49% in 9MFY20 with impressive EBITDA margins of 14.2%. The company has been exiting the non-core international markets, which has been a drag on sales growth. We value TGBL on an SOTP basis, valuing the India domestic business (including TCL’s consumer business) at 5x FY22E sales, international business (US, UK, Canada) at 0.75x FY22E sales and Starbucks JV at 2x FY22E sales. We reiterate our BUY rating on the stock with a target price of | 450 per share. Key Financial Summary s Key Financials FY18 FY19 FY20E FY21E FY22E CAGR (FY19-22E) Net Sales 6815.4 7251.5 7558.5 10257.0 10978.9 14.8% EBITDA 838.9 785.9 945.7 1450.4 1623.8 27.4% EBITDA Margin % 12.3 10.8 12.5 14.1 14.8 Net Profit 556.5 457.0 502.4 875.7 998.1 29.7% EPS (|) 8.8 7.2 8.0 9.5 10.8 P/E 44.2 53.9 49.0 41.0 36.0 RoNW % 8.1 6.5 6.8 6.5 7.2 RoCE (%) 8.7 8.4 8.7 8.6 9.4

Source: Company, ICICI Direct Research Result Update | Tata Global Beverages ICICI Direct Research

Exhibit 1: Variance Analysis EESes Q3FY20 Q3FY19 YoY (%) Q2FY20 QoQ (%) Comments Net sales increased 2.6% YoY mainly driven by 20% growth in non-branded Net Sales 1,961.9 1,912.6 2.6 1,834.1 7.0 business. India tea business reported decent volume growth of 7% during the quarter Gross margins improved 142 bps YoY on account of lower commodity Raw Material Expenses 1,056.3 1,056.9 -0.1 1,010.3 4.6 costs Employee Expenses 209.0 205.1 1.9 199.0 5.0 SG&A Expenses 171.9 155.2 10.8 136.7 25.8 Other operating Expenses 285.1 299.1 -4.7 253.5 12.5

EBITDA 239.6 196.2 22.1 234.7 2.1 Operating margins expanded 195 bps to 12.8% as gross margins improved EBITDA Margin (%) 12.2 10.3 195 bps 12.8 -58 bps 142 bps YoY in addition to 110 bps decline in other overheads to sales Depreciation 49.2 29.6 65.9 46.8 5.0 Depreciation increased owing to adoption of Ind-AS accounting standard Interest 19.2 13.0 48.4 20.1 -4.2 Interest increased owing to adoption of Ind-AS accounting standard Other Income 26.0 22.6 14.9 25.3 2.6 Exceptional Expense/(Income) 0.8 0.0 NA 1.5 NA PBT 196.4 176.2 11.4 191.6 2.5 Tax Outgo 55.9 54.9 1.8 48.3 15.7 PAT before MI 140.5 121.3 15.8 143.2 -1.9 Profit from Associates -4.6 -12.4 NA 9.2 NA Led by higher operating profit, lower tax rate and better performance from PAT 135.9 108.9 24.8 152.5 -10.9 associate and JVs on a YoY basis, PAT increased 24.8% YoY to | 135.9 crore Adj. PAT 136.5 108.9 25.3 153.6 -11.2

Source: Company, ICICI Direct Research

Exhibit 2: Change in estimates FY20E FY21E FY22E Comments (| Crore) Old New % Change Old New % Change New We introduce FY22E numbers. Tata Chemicals consumer Sales 7648.4 7558.5 -1.2 8094.8 10257.0 26.7 10,978.9 business numbers incorporated EBITDA 1020.2 945.7 -7.3 1090.5 1450.4 33.0 1,623.8 Revise margin estimates on account of higher marketing EBITDA Margin (%) 13.3 12.5 -83 bps 13.5 14.1 64 bps 14.8 spends on account of new launches in India and international markets PAT 581.3 509.8 -12.3 639.0 875.7 37.0 998.1 EPS (|) 9.2 8.0 -13.6 10.1 9.5 -5.9 10.8

Source: Company, ICICI Direct Research

Exhibit 3: Assumptions Current Earlier Comments FY18 FY19 FY20E FY21E FY22E FY20E FY21E FY21 revenue estimates revised upwards on account Standalone Sales (| crore) 3,217.3 3,429.7 3,669.7 3,926.6 4,201.5 3,669.7 3,709.5 of strong performance in domestic business

Growth (%) 5.0 6.6 7.0 7.0 7.0 7.0 5.8 Subsidiary revenue estimates lowered due to Subsidiary Sales (| crore) 2,716.6 2,895.9 2,828.3 2,915.1 3,024.0 2,923.4 3,330.4 declining black tea revenues Growth (%) -2.6 6.6 -2.3 3.1 3.7 1.0 4.0 Segmental Revenues (Gross) Tea 4,922.8 5,202.6 5,400.3 5,724.3 6,067.8 5,462.7 5,790.5 Coffee 1,079.5 1,202.8 1,184.8 1,244.0 1,293.8 1,214.9 1,338.8 Others 35.7 30.8 28.3 29.7 31.2 32.3 33.9 Non-branded 815.2 842.5 977.3 1,035.9 1,087.7 968.8 946.6 TCL Consumer 2,255.2 2,525.8 No. of Starbucks stores 116 146 176 196 216 176 186

Source: Company, ICICI Direct Research

ICICI Securities | Retail Research 2 Result Update | Tata Global Beverages ICICI Direct Research

Conference Call Highlights

 TGBL’s India business witnessed volume growth of 7% and revenue growth of 6% aided by strong growth in national and regional brands. Tata Tea Agni and Tata Tea Spice Mix saw double digit revenue growth Strong revenue growth was seen even in the Tata Tea Premium brand. As per the management, the Lal Ghoda brand, which was acquired last year, has been well integrated into the company and delivered growth as per expectations

 The company launched multi-regional marketing campaign ‘Desh Ki Chai’ campaign under Tata Tea Premium across Uttar Pradesh, Delhi, Punjab and Haryana

 US coffee sales witnessed 2% volume de-growth with underlying revenue de-growth of 3% on account of higher promotional spend and increased competitive intensity in Eight O’ Clock. However, K-cups and private label coffee segments witnessed some volume growth during the quarter. Also, Good Earth tea grew in double digits in Q3FY20. The company launched Good Earth Ayurveda exclusively on an e-commerce channel

 Other international businesses (UK, Canada) witnessed muted volume growth of 1% during the quarter. On the one hand, the UK market witnessed flat revenue growth, impacted by a decline in black tea market and growth challenges in the green tea category. On the other hand, the Canada market witnessed some improvement in revenue with 5% growth driven by higher black tea & speciality tea sales and new launches. Tetley Cold Infusions and Tetley black tea were able to maintain 23% and 29% in UK and Canada, respectively

 Tata Coffee, which includes Vietnam business, posted robust revenue growth of 25% YoY at | 210 crore driven by 14% volume growth with 14.5% EBITDA margin during the quarter. Robust growth was registered on account of Instant coffee and Vietnam business. Domestic instant Coffee volumes were recorded at 2052 MT during the quarter. Profitability improved driven by higher volumes and one-time gains on sale of property in the previous year

 Starbucks store count was at 174 stores (opened 28 new stores in Q3FY20). Topline saw strong growth of ~27% during the quarter

 Nourishco (50-50 JV with PepsiCo) witnessed 4% volume de-growth during the quarter impacted by decline in Tata Gloco Plus. Tata Gluco Plus saw volume decline due to adverse weather conditions in Odisha and Andhra Pradesh. Himalayan witnessed 5% YoY revenue growth during the quarter. Tata water Plus PET continued robust growth (3% revenue growth) with distribution expansion

 On the M&A front, the management highlighted that merger process with the Tata Chemicals consumer business is on track as per the scheduled timeline. The merger has been approved by NCLT, Kolkata and Mumbai. As per the management, the merger process is in the final stages and an effective date for the record date would be announced shortly

 TGBL sold 100% stake in its Czech business during the quarter to Dr Müller Pharma for €4 million (~| 30 crore). The company has been exiting the non-core international markets and focusing on markets that have potential and scope for growth

ICICI Securities | Retail Research 3 Result Update | Tata Global Beverages ICICI Direct Research

Key Metrics

Exhibit 4: Standalone revenue trend Exhibit 5: Consolidated revenue to grow at 14.8% in FY19-22E

35.7 5000 7.0 9 12000 40 6.8 6.6 7.0 7.0 4000 10000 30 5.0 6 8000 6.4 20 3000 4.2 7.0 6000 2.2 0.5 10 2000 2.6 3 4000 -15.3 0 1000 2000 -10 2987 3064 3217 3430 3670 3927 4201 6637 6780 6815 7252 7558 10257 10979 0 0 0 -20 FY16 FY17 FY18 FY19 FY20E FY21E FY22E FY16 FY17 FY18 FY19 FY20E FY21E FY22E

Consolidated Sales (| crore) % Growth Std. Sales (| crore) Growth (%)

Source: ICICI Direct Research, Company Source: ICICI Direct Research, Company

Exhibit 6: Operating margins trend % Exhibit 7: Adjusted PAT to grow at 27.8% in FY19-22E

1800.0 14.1 14.8 16.0 1200 998.1 1600.0 875.7 12.3 12.5 14.0 1000 11.7 1400.0 800 10.8 12.0 572.4 9.9 600 478.4 509.8 1200.0 451.1 10.0 400 1000.0 8.0 200 800.0 0 6.0 600.0 -200 -96.4 FY16* FY17 FY18 FY19 FY20E FY21E FY22E 400.0 4.0

200.0 2.0 Adj. PAT (| crore)

654.3 791.1 838.9 785.9 945.7 1623.8 1450.4 0.0 0.0 Source: Company, ICICI Direct Research FY16 FY17 FY18 FY19 FY20E FY21E FY22E EBITDA (| crore) Source: Company, ICICI Direct Research

Exhibit 8: Valuation Sales Growth EPS Growth PE EV/EBITDA RoNW RoCE (| cr) (%) (|) (%) (x) (x) (%) (%) FY19 7251.5 6.4 7.2 -17.9 53.9 30.9 6.5 8.4 FY20E 7558.5 4.2 8.0 9.9 49.0 25.3 6.8 8.7 FY21E 10257.0 35.7 9.5 19.4 41.0 16.8 6.5 8.6 FY22E 10978.9 7.0 10.8 14.0 36.0 15.0 7.2 9.4

Source: Company, ICICI Direct Research

ICICI Securities | Retail Research 4 Result Update | Tata Global Beverages ICICI Direct Research

Exhibit 9: Recommendation History vs. Consensus 500 100.0 450 90.0 400 80.0 350 70.0 300 60.0

(|) 250 50.0 (%) 200 40.0 150 30.0 100 20.0 50 10.0

0 0.0

Jul-17 Jul-18 Jul-19

Oct-17 Oct-18 Oct-19

Apr-18 Apr-19 Apr-17

Feb-18 Feb-19 Feb-20

Jan-18 Jan-19 Jan-20

Jun-17 Jun-17 Jun-18 Jun-19

Sep-17 Sep-18 Sep-19

Dec-18 Dec-19 Dec-17

Nov-17 Nov-18 Nov-19

Aug-18 Aug-19 Aug-17

Mar-17 Mar-18 Mar-19

May-18 May-19 May-17 Price Idirect target Consensus Target Mean % Consensus with BUY

Source: Bloomberg, Company, ICICI Direct Research

Exhibit 10: Top 10 Shareholders Rank Investor Name Filing Date % O/S Position (m) Change (m) 1 Tata Sons Ltd 30-Jun-19 29.5 186.0 0.0 2 First State Investment 25-Sep-18 9.2 57.8 0.0 3 Tata Investment Corp 30-Jun-19 4.3 26.9 0.0 4 Mirae Asset Global 30-Jun-19 3.3 20.6 3.6 5 Reliance Capital Trust 31-Dec-19 3.2 20.0 0.2 6 Government Pension Fund 30-Jun-19 2.2 13.6 0.0 7 Fmr Llc 30-Nov-19 2.1 13.3 1.4 8 Norges Bank 31-Dec-18 2.0 12.9 0.0 9 Dimensional Fund Adv 30-Nov-19 1.8 11.4 -0.2 10 Baron Emerging Mrkts 30-Jun-19 1.6 10.3 2.3

Source: Reuters, ICICI Direct Research

Exhibit 11: Shareholding Pattern (in %) Dec-18 Mar-19 Jun-19 Sep-19 Dec-19 Promoter 34.5 34.5 34.5 34.5 34.5 FII 24.7 25.4 26.6 27.8 26.0 DII 14.2 13.7 13.1 12.8 14.9 Others 26.6 26.5 25.8 24.9 24.6

Source: Company, ICICI Direct Research

ICICI Securities | Retail Research 5 Result Update | Tata Global Beverages ICICI Direct Research

Financial summary

Exhibit 12: Profit and loss statement | crore Exhibit 13: Cash flow statement | crore (Year-end March) FY19 FY20E FY21E FY22E (Year-end March) FY19 FY20E FY21E FY22E Total Operating Income 7251.5 7558.5 10257.0 10978.9 Profit/Loss after Tax 567.3 502.4 875.7 998.1 Growth (%) 6.4 4.2 35.7 7.0 Add: Depreciation 122.6 188.6 182.8 185.2 Raw Material Expenses 4,007.6 4,160.9 5,822.7 6,119.2 Add: Interest -10.2 74.7 67.2 63.4 Employee Expenses 806.3 819.8 1,028.9 1,122.6 (Inc)/dec in Current Assets -288.2 159.6 -916.7 -601.4 Marketing Expenses 547.5 554.1 617.3 682.4 Inc/(dec) in Current Liabilities -100.0 -248.2 436.2 116.7 Administrative Expenses 0.0 0.0 0.0 0.0 CF from operating activities 209.9 677.2 645.2 761.9 Other expenses 1,104.1 1,077.9 1,337.6 1,430.8 (Inc)/dec in Investments 286.4 -8.6 -8.9 -9.2 Total Operating Expenditure 6,465.6 6,612.7 8,806.6 9,355.1 (Inc)/dec in Fixed Assets -256.6 28.9 -500.0 -100.0 EBITDA 785.9 945.7 1450.4 1623.8 Others 43.5 89.7 -5,513.6 23.1 Growth (%) -6.3 20.3 53.4 12.0 CF from investing activities 73.3 109.9 -6022.5 -86.1 Depreciation 122.6 188.6 182.8 185.2 Issue/(Buy back) of Equity 0.0 0.0 29.0 0.0 Interest 52.5 74.7 67.2 63.4 Inc/(dec) in loan funds 35.8 -40.0 -40.0 -40.0 Other Income 157.1 110.0 115.5 121.3 Dividend paid & dividend tax -215.8 -375.5 -548.3 -548.3 PBT 768.0 792.5 1,315.9 1,496.5 Inc/(dec) in Sec. premium 0.0 0.0 5,600.0 0.0 Exceptional items -33.3 -10.4 0.0 0.0 Others -43.7 -74.7 -67.2 -63.4 Total Tax 260.9 227.6 382.9 435.5 CF from financing activities -223.7 -490.2 4973.6 -651.7 PAT 457.0 502.4 875.7 998.1 Net Cash flow 59.4 296.9 -403.8 24.2 Growth (%) -17.9 9.9 74.3 14.0 Opening Cash 698.2 737.5 1,034.4 630.6 Adjusted EPS (|) 7.6 8.1 9.5 10.8 Closing Cash 1033.6 1330.5 926.7 950.9

Source: Company, ICICI Direct Research Source: Company, ICICI Direct Research

Exhibit 14: Balance sheet | crore Exhibit 15: Key ratios | crore (Year-end March) FY19 FY20E FY21E FY22E (Year-end March) FY19 FY20E FY21E FY22E Liabilities Per share data (|) Equity Capital 63.1 63.1 92.2 92.2 EPS 7.2 8.0 9.5 10.8 Reserve and Surplus 7,268.6 7,395.5 13,322.9 13,772.7 Cash EPS 9.2 10.9 11.5 12.8 Total Shareholders funds 7,331.7 7,458.6 13,415.1 13,864.9 BV 116.2 118.2 145.6 150.5 Long Term Borrowings 787.2 747.2 707.2 667.2 DPS 3.0 5.0 5.0 5.0 Long Term Provisions 152.2 241.9 328.2 351.3 Cash Per Share 16.4 21.1 10.1 10.3 Other Non-current Liabilities 1197.6 1197.6 1197.6 1197.6 Operating Ratios (%) Total Liabilities 9468.8 9645.4 15648.2 16081.1 EBITDA Margin 10.8 12.5 14.1 14.8 Assets PBT / Net Sales 10.6 10.5 12.8 13.6 Gross Block 7,015.5 7,115.5 7,615.5 7,715.5 PAT Margin 6.3 6.6 8.5 9.1 Less: Acc Depreciation 2,231.1 2,419.6 2,602.4 2,787.6 Inventory days 81.0 90.0 85.0 90.0 Net Block 4,913.3 4,695.9 5,013.1 4,927.9 Debtor days 34.3 40.0 35.0 40.0 Capital WIP 424.4 424.4 424.4 424.4 Creditor days 33.5 25.0 25.0 25.0 Goodwill 0.0 0.0 5600.0 5600.0 Return Ratios (%) Non Current Investments 604.5 613.1 622.0 631.2 RoE 6.5 6.8 6.5 7.2 LT Loans & Advances/Others 448.5 448.5 448.5 448.5 RoCE 8.4 8.7 8.6 9.4 Current Assets RoIC 8.9 10.1 15.1 16.3 Inventory 1,609.9 1,863.7 2,388.6 2,707.1 Valuation Ratios (x) Debtors 680.6 828.3 983.5 1,203.2 P/E 53.9 49.0 41.0 36.0 Cash 1,033.6 1,330.5 926.7 950.9 EV / EBITDA 30.9 25.3 16.8 15.0 Loans & Advances 828.2 497.0 674.4 721.9 EV / Net Sales 3.3 3.2 2.4 2.2 Other Current Assets 395.8 165.7 224.8 240.6 Market Cap / Sales 3.4 3.3 2.4 2.2 Current Liabilities Price to Book Value 3.4 3.3 2.7 2.6 Creditors 664.9 517.7 702.5 752.0 Provisions 49.5 124.2 168.6 180.5 Solvency Ratios Short Term Borrowings 329.7 331.3 449.6 481.3 Debt/EBITDA 1.4 1.1 0.8 0.7 Other CL 425.9 248.5 337.2 361.0 Debt / Equity 0.2 0.1 0.1 0.1 Net Current Assets 3,078.0 3,463.4 3,540.1 4,049.0 Current Ratio 3.1 3.8 3.5 3.8 Total Assets 9468.8 9645.4 15648.2 16081.1 Quick Ratio 1.7 1.7 1.6 1.7

Source: Company, ICICI Direct Research Source: Company, ICICI Direct Research

ICICI Securities | Retail Research 6 Result Update | Tata Global Beverages ICICI Direct Research

Exhibit 16: ICICI Direct coverage universe (FMCG) CMP TP M Cap EPS (|) P/E (x) Price/Sales (x) RoCE (%) RoE (%) Sector / Company (|) (|) Rating (| Cr) FY19E FY20E FY21E FY19E FY20E FY21E FY19E FY20E FY21E FY19E FY20E FY21E FY19E FY20E FY21E Colgate (COLPAL) 1,370 1,430 Hold 36,990 28.5 30.6 32.6 48.0 44.7 42.0 8.3 8.0 7.4 70.7 75.5 82.9 52.2 59.7 65.1 Dabur India (DABIND) 505 550 Buy 84,312 8.2 9.3 10.3 61.7 54.4 49.1 9.9 9.0 8.2 29.6 29.9 30.0 25.7 26.8 26.7 GSK CH (GLACON) 9,310 8,780 Hold 35,327 233.7 272.5 N.A. 39.8 34.2 N.A. 7.4 6.8 N.A. 36.1 32.6 N.A. 24.0 24.8 N.A. Hindustan Unilever (HINLEV) 2,160 2,150 Hold 448,200 27.9 33.6 37.0 77.3 64.2 58.3 11.9 11.1 9.8 85.3 105.8 115.0 80.9 90.6 100.3 ITC Limited (ITC) 215 270 Buy 266,028 10.3 12.6 13.7 21.0 17.0 15.7 6.0 5.6 5.1 30.8 30.8 30.7 21.5 24.4 23.6 Jyothy Lab (JYOLAB) 153 185 Hold 6,363 5.3 5.9 6.5 28.8 26.0 23.5 3.6 3.3 3.0 28.6 28.5 30.6 22.6 22.4 23.5 Marico (MARLIM) 305 350 Hold 40,641 8.8 8.4 8.7 34.7 36.4 34.9 5.5 5.4 4.9 38.0 41.2 41.9 31.6 33.9 34.4 Nestle (NESIND) 16,300 14,575 Hold 137,881 166.7 209.8 254.4 97.8 77.7 64.1 12.3 11.1 9.8 42.9 41.8 43.3 45.6 47.2 47.6 Tata Global Bev (TATGLO) 390 450 Buy 24,613 7.2 8.0 9.5 53.9 49.0 41.0 3.4 3.3 2.4 8.4 8.7 8.6 6.5 6.8 6.5 VST Industries (VSTIND) 4,300 5,200 Buy 6,949 146.9 198.4 218.4 29.3 21.7 19.7 6.3 5.5 5.1 51.4 53.6 50.2 34.2 38.8 37.0 Varun Beverage (VARBEV) 810 820 Buy 19,877 11.7 16.4 14.4 69.1 49.3 56.1 5.0 3.9 2.8 12.7 14.2 14.1 12.1 15.0 12.0

Source: Company, ICICI Direct Research

ICICI Securities | Retail Research 7 Result Update | Tata Global Beverages ICICI Direct Research

RATING RATIONALE ICICI Direct endeavours to provide objective opinions and recommendations. ICICI Direct assigns ratings to its stocks according to their notional target price vs. current market price and then categorizes them as Buy, Hold, Reduce and Sell. The performance horizon is two years unless specified and the notional target price is defined as the analysts' valuation for a stock

Buy: >15% Hold: -5% to 15%; Reduce: -15% to -5%; Sell: <-15%

Pankaj Pandey Head – Research [email protected]

ICICI Direct Research Desk, ICICI Securities Limited, 1st Floor, Akruti Trade Centre, Road No 7, MIDC, Andheri (East) Mumbai – 400 093 [email protected]

ICICI Securities | Retail Research 8 Result Update | Tata Global Beverages ICICI Direct Research

ANALYST CERTIFICATION

I/We, Sanjay Manyal, MBA (Finance) and Kapil Jagasia, CFA, MBA (Finance), Research Analysts, authors and the names subscribed to this report, hereby certify that all of the views expressed in this research report accurately reflect our views about the subject issuer(s) or securities. We also certify that no part of our compensation was, is, or will be directly or indirectly related to the specific recommendation(s) or view(s) in this report. It is also confirmed that above mentioned Analysts of this report have not received any compensation from the companies mentioned in the report in the preceding twelve months and do not serve as an officer, director or employee of the companies mentioned in the report.

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ICICI Securities | Retail Research 9