GICS Industry: Food Products l Sub Industry: Packaged Foods & Meats l Website: www.tatatea.

com

Tata Global Beverages Ltd

Key Stock Indicators

NSE Ticker: TATAGLOBAL CMP (as on 21 Jan 2011 Rs/Share): 105.65 Shares outstanding (mn): 618.4
Bloomberg Ticker: TGBL:IN 52-week range up to 21 Jan 2011 (Rs) (H/L): 1199.65/101.90 Free Float (%): 64.8
Face value / Share: 10.0 Market Cap as on 21 Jan 2011 (Rs Mn): 65,334 Average daily volumes (12 months): 728,589
Div. Yield (%): 18.9 Enterprise Value as on 21 Jan 2011 (Rs mn): 64,263 Beta (2 year): 0.6
Div. Yield (%): 0.0

Tata Global Beverages Limited (TGBL), a Tata group company, was incorporated in 1963.
Headquartered in Kolkata, it is the second largest integrated tea company in the world, operating in Key Financial Indicators
over 40 countries. It owns 53 estates spread over 24,500 hectares in Assam, West Bengal, Tamil
Mar-08 Mar-09 Mar-10
Nadu and Kerala. TGBL is present in tea, coffee, plantation extracts and packaged water segments.
Its product portfolio includes brands such as Tetley, Tata Tea, Good Earth, Vitax Jemca, Eight Revenue (Rs mn) 43,847.2 48,621.1 57,972.9
O’clock Coffee, Mr. Bean, Grand and Himalayan. EBITDA ma rgins (%) 15.8 13.8 12.1
PAT (Rs mn) 19,337.6 8,568.3 4,263.5
KEY HIGHLIGHTS
PAT ma rgins (%) 44.1 17.6 7.4
Integrated player with a diversified portfolio Gea ring (x) 2.1 1.8 1.1
TGBL is engaged in manufacturing, processing, marketing and distribution of tea products and EPS (Rs /s ha re) 313.7 139.0 69.2
coffee. Tea is the core product of TGBL, and is the volume leader with ~22% market share in the
Indian branded packet tea segment. The company is also present in coffee plantations, coffee
PE (x) 2.6 4.2 1.5
curing, roasted and grounded coffees, instant coffees and coffee vending. Recently, the company P/BV (x) 4.1 2.6 0.4
forayed into the cold drinks market with the launch of TION, a tea and fruit-based cold beverage. RoCE (%) 85.1 18.4 25.5
Tata Tea Inc, a subsidiary company in the US, is involved in the marketing and value addition of tea
RoE (%) - 65.5 28.7
extracts. Branded products contribute 90% of TGBL’s turnover; the remaining comes from
plantation and extraction activities. Over 65% of consolidated revenues come from markets outside EV/EBITDA (x) 9.2 7.4 0.8
India, mainly in developed retail markets. Tea contributed 67% of the total revenues in FY10, n.m.: Not meaningful
followed by coffee (20%) and beverages (13%).
Shareholding (As on December 31, 2010)
Owns several strong brands
TGBL has several brands such as Tata Tea, Tetley, Good Earth, Eight O’clock, Vitax and Jemca. Tata Others
Tea is the volume leader in the branded packet tea segment with a 21.4% market share. Tetley has DII
23%
continued its strong performance in the UK, where it has 28% market share. Similar results have 33%
been achieved in North America. Tetley continues to have black tea market leadership in the UK
with 46% market share and is the fastest growing brand in the green tea segment there. Good
Earth, which is a herbal and speciality tea business, has an established base in the US West Coast,
while Himalayan has positioned itself in the Indian packaged water market as the lifestyle natural
mineral water brand.

Strategic alliances, acquisitions for global reach

In FY10, the company signed a Memorandum of Understanding (MoU) with PepsiCo Inc, for
production of non-carbonated ready-to-drink beverages. TGBL also increased its stake in its
FII Promoter
subsidiary, Mount Everest Mineral Water Ltd, to 40.92% from 35.99%. In September 2009, TGBL’s 8% 36%
company's UK subsidiary acquired a 51% stake -- along with the European Bank of Reconstruction
and Development -- in Suntyco Holding Ltd, providing TGBL a presence in the tea and coffee market
Indexed price chart
in Russia. Also, TGBL has expanded in Poland, by acquiring Premium Foods in March 2009. These
acquisitions have helped the company to cater to new markets.
(index) ('000)
160 8000
KEY RISKS 140 7000
• Poor weather conditions and pest attack 120 6000
• Increase in labour cost 100 5000
• Foreign exchange fluctuation -- over 65% of revenue are generated outside India 80 4000
Stock Performances vis-à-vis market 60 3000
40 2000
Returns (%)
20 1000
YTD 1-m 3-m 12-m 0 0
Feb-10

Apr-10

Jun-10
Jul-10
Aug-10
Sep-10
Oct-10
Nov-10
Dec-10
Jan-10

Mar-10

May-10

TATAGLOBAL 9 -9 -19 7
NIFTY 8 -4 -5 9
Volumes (RHS) TATAGLOBAL NIFTY

Note:
1) YTD returns are since Apr 01, 2010 to Jan 21, 2011.
2) 1-m, 3-m and 12-m returns are up to Jan 21, 2011

CRISIL COMPANY REPORT | 1

 Tata Global Beverages Ltd
BACKGROUND

Incorporated in 1963, TGBL is a Tata group company. The name of the company was changed from Tata Tea Ltd to Tata Global Beverages Ltd with effect from July 2, 2010.
It is headquartered in Kolkata and is the second largest integrated tea company in the world. TGBL has 53 estates spread over 24,500 hectares in Assam, West Bengal, Tamil
Nadu and Kerala. It is present in tea, coffee, plantation extracts and packaged water segments and fruit-based cold beverage. Its product portfolio includes brands such as
Tetley, Tata Tea, Good Earth, Vitax Jemca, Eight O’clock Coffee, Mr. Bean, Grand and Himalayan. It manufactures ~70 mn kg of tea in India. TGBL has a strong distribution
network in the country with 38 clearing and forwarding agents and 2,500 stockists, which cater to over 1.7 mn retail outlets in the country.

The company has a 100% export-oriented unit (EOU) manufacturing instant tea in Munnar, Kerala. Tea accounts for 67% of the company’s revenues, with the balance
coming from coffee and other products. Over 65% of its business is outside India.

COMPETITIVE POSITION

Peer Comparison
Tata Global Beverages McLeod Russel India Jay Shree Tea & Industries
Ltd Ltd Ltd
Mar-10 Mar-10 Mar-10
Revenue (Rs mn) 57,972.9 11,322.9 4,099.7
EBITDA ma rgins (%) 12.1 32.2 17.1
PAT (Rs mn) 4,263.5 2,304.0 617.4
PAT ma rgins (%) 7.4 20.3 15.1
Gea ring (x) 1.1 0.8 1.2
EPS (Rs /s ha re) 69.2 21.0 55.3
PE (x) 1.5 10.2 3.2
P/BV (x) 0.4 4.1 0.9
RoCE (%) 25.5 34.2 19.9
RoE (%) 28.7 47.8 32.8
EV/EBITDA (x) 0.8 7.4 5.6
n.m: Not meaningful

FINANCIAL PROFILE Key Financial Indicators

Top-line increases, but EBITDA margin declines in FY10 Units Mar-08 Mar-09 Mar-10
Top-line of the company registered a growth of 19% year-on-year in FY10; revenue Revenue Rs mi ll ion 43,847.2 48,621.1 57,972.9
grew to Rs 5.8 bn, from Rs 4.8 bn in FY09. Top-line growth was mainly driven by
strong performance in the branded tea segment, as both volumes and realizations EBITDA ma rgins Per cent 15.8 13.8 12.1
increased. PAT Rs mi ll ion 19,337.6 8,568.3 4,263.5
Operating margin came under pressure in FY10, owing to increased spending on PAT ma rgins Per cent 44.1 17.6 7.4
brand building, promotions and new product development and launches. Operating
Revenue growth Per cent 8.6 10.9 19.2
margin dipped by 160 bps to 12.1% in FY10, as against 13.8% in FY09.
EBITDA growth Per cent -2.5 -3.5 5.0
PAT halves due to absence of exceptional income
PAT growth Per cent 345.3 -55.7 -50.2
PAT halved to Rs 4.2 bn in FY10 from Rs 8.5 bn in FY09, primarily because FY09’s
result was boosted by exchange gains and an exceptional income of Rs 7.3 bn. TGBL Gea ring Times 2.1 1.8 1.1
had exceptional income of just Rs 161.3 mn in FY10.
RoCE Per cent 85.1 18.4 25.5
RoE Per cent 0.0 65.5 28.7

INDUSTRY PROFILE

Tea

India is the world’s second-largest tea producer with 27 per cent of global production. The global tea production is concentrated in India, China, Sri Lanka and Kenya. The
domestic tea industry is fragmented with a large number of small and medium-sized players. Assam and West Bengal are the largest tea-producing state, accounting for
around 51 per cent and 23 per cent, respectively. Tamil Nadu and Kerala are the major tea-producing states in the south. Domestic tea consumption has been growing at a
CAGR of 2 per cent since 2005. Tea drinking population (above 10 years) and per capita consumption are factors affecting domestic consumption. During 2009, domestic
consumption outstripped production resulting in a decline in inventories. Consequently, tea prices surged 25 per cent during the year. The decline in production was mainly
on account of unfavourable monsoons which affected production during 2009. During mid 2010, unfavourable weather and the pest attack affected the tea crop in Assam.
On the other hand, the southern region witnessed an increase in production in 2010 as compared to 2009 due to favourable climatic conditions.

CRISIL COMPANY REPORT | 2

Tata Global Beverages Ltd
ANNUAL RESULTS

Income Statement Balance sheet

(Rs million ) Mar-08 Mar-09 Mar-10 (Rs million ) Mar-08 Mar-09 Mar-10
Net Sales 43,656.9 48,478.7 57,829.5 Equity share capital 616.4 616.4 616.4
Operating Income 43,847.2 48,621.1 57,972.9 Reserves and surplus 11,872.0 13,039.3 15,481.9
Tangible net worth 12,488.4 13,655.7 16,098.3
EBITDA 6,927.4 6,685.5 7,017.0 Deferred tax liablity:|asset| 367.8 483.7 747.5
EBITDA Margin 15.8 13.8 12.1 Long-term debt 21,436.2 19,117.0 15,144.8
Short-term-debt 4,656.8 5,193.7 2,823.1
Depreciation 916.3 986.9 1,029.2 Total debt 26,093.1 24,310.7 17,967.8
Interest 2,525.8 -5,694.5 2,597.2 Current liabilities 10,263.5 12,071.9 12,460.0
Other Income 1,575.5 2,186.4 3,724.8 Total provisions 3,788.0 4,066.4 3,090.1
Total liabilities 53,000.8 54,588.4 50,363.7
PBT 20,914.5 12,812.4 6,740.2 Gross block 10,895.1 11,244.2 11,757.6
PAT 19,337.6 8,568.3 4,263.5 Net fixed assets 5,333.1 5,237.1 5,238.5
Investments 13,910.1 3,513.0 5,191.1
PAT Margin 44.1 17.6 7.4 Current assets 33,757.5 45,838.2 39,934.1
Receivables 4,422.0 4,499.8 5,197.2
No. of shares (Mn No.) 61.6 61.6 61.6 Inventories 5,450.3 7,444.4 9,216.5
Cash 13,232.0 10,891.5 19,038.3
Earnings per share (EPS) 313.7 139.0 69.2 Total assets 53,000.7 54,588.3 50,363.7

Cash flow Ratio

(Rs million ) Mar-08 Mar-09 Mar-10 Mar-08 Mar-09 Mar-10
Pre-tax profit 5,060.8 13,579.5 7,115.4 Revenue growth (%) 8.6 10.9 19.2
Total tax paid -1,620.7 -4,128.2 -2,213.0 EBITDA growth(%) -2.5 -3.5 5.0
Depreciation 916.3 986.9 1,029.2 PAT growth(%) 345.3 -55.7 -50.2
Change in working capital -5,016.0 -12,334.4 13,462.8
EBITDA margins(%) 15.8 13.8 12.1
Tax rate (%) 7.1 33.9 36.2
Cash flow from operating activities -659.6 -1,896.2 19,394.4 PAT margins (%) 44.1 17.6 7.4
Capital Expenditure 26,378.6 -1,876.8 252.7
Investments and others -7,428.5 10,397.0 -1,678.1 Dividend payout (%) 11.2 12.6 29.0
Dividend per share (Rs) 35.1 17.6 20.1
Cash flow from investing activities 18,950.1 8,520.2 -1,425.4 BV (Rs) 202.6 221.5 261.2
Equity raised/(repaid) 2,310.7 -661.3 0.0 Return on Equity (%) 0.0 65.5 28.7
Debt raised/(repaid) -19,684.5 -1,782.4 -6,342.9 Return on capital employed (%) 85.1 18.4 25.5
Dividend (incl. tax) -2,532.2 -1,253.3 -1,456.3
Others (incl extraordinaries) 13,659.9 -5,267.4 -2,023.1 Gearing (x) 2.1 1.8 1.1
Interest coverage (x) 2.7 0.0 2.7
Debt/EBITDA (x) 3.8 3.6 2.6
Cash flow from financing activities -6,246.1 -8,964.4 -9,822.3
Change in cash position 12,044.4 -2,340.4 8,146.7 Asset turnover (x) 3.6 4.4 5.0
Opening cash 1,187.6 13,232.0 10,891.5 Current ratio (x) 2.4 2.1 2.3
Closing cash 13,232.0 10,891.5 19,038.3 Gross current assets (days) 276 326 250
n.m : Not meaningful;

QUARTERLY RESULTS

Profit and loss account

(Rs million) Sep-10 % of Rev Sep-09 % of Rev Jun-10 % of Rev Sep-10 % of Rev Sep-09 % of Rev
No of Months 3 3 3 6 6
Revenue 14,668.8 100.0 14,255.6 100.0 13,843.6 100.0 28,512.4 100.0 27,257.5 100.0
EBITDA 1,503.3 10.2 1,966.5 13.8 1,412.1 10.2 2,915.4 10.2 3,766.4 13.8
Interes t 143.8 1.0 97.8 0.7 115.4 0.8 259.2 0.9 150.3 0.6
Deprecia ti on 251.2 1.7 251.5 1.8 243.2 1.8 494.4 1.7 496.2 1.8
PBT 984.4 6.7 4,061.6 28.5 846.6 6.1 1,831.0 6.4 3,655.8 13.4
PAT 603.6 4.1 3,100.4 21.7 521.6 3.8 1,125.2 3.9 2,722.1 10.0

CRISIL COMPANY REPORT | 3

Tata Global Beverages Ltd
FOCUS CHARTS & TABLES

Rs mn Quarterly sales & y-o-y growth Per cent Rs mn Quarterly PAT & y-o-y growth Per cent
20,000 300 20,000 1,400
18,000 1,200
250 15,000
16,000 1,000
200 800
14,000 10,000
12,000 150 600
10,000 100 400
5,000
8,000 50 200
6,000 0 0
0
4,000 -200
2,000 -50 -5,000 -400

Dec-07

Jun-08
Sep-08
Dec-08

Jun-09
Sep-09
Dec-09

Jun-10
Sep-10
Mar-08

Mar-09

Mar-10
0 -100
Dec-07

Jun-08
Sep-08
Dec-08

Jun-09
Sep-09
Dec-09

Jun-10
Sep-10
Mar-08

Mar-09

Mar-10
Sales Sales growth y-o-y (RHS) Net Profit Net profit growth y-o-y (RHS)

Rs/share EPS Per cent Movement in operating and net margins

250 200

200 150

150 100

100 50
0
50
-50
0
-100
-50
Dec-07

Jun-08

Sep-08

Dec-08

Jun-09

Sep-09

Dec-09

Jun-10

Sep-10
Mar-08

Mar-09

Mar-10
Dec-07

Jun-08

Sep-08

Dec-08

Jun-09

Sep-09

Dec-09

Jun-10

Sep-10
Mar-08

Mar-09

Mar-10

OPM NPM

Shareholding Pattern (Per cent) Board of Directors

Mar 2010 Jun 2010 Sep 2010 Dec 2010 Director Name Designation
Ratan Nava l Tata (Dr.) Non-Executive Cha irman, Promoter-
Promoter 35.4 35.4 35.2 35.2
Director, Non-Executi ve Di rector
FII 8.0 6.9 7.7 8.0
Rayorath Kuttamball y Vice Cha irman, Non-Executive
DII 35.7 35.8 34.4 33.3 Kris hnakuma r (Mr.) Director, Promoter-Di rector
Others 21.0 21.9 22.7 23.5
Percy Temura s p Si ga nporia (Mr.) Managing Director
Jimmy Soli Bi limoria (Mr.) Non-Executive Director
Arunkumar Ramanla l Gandhi Non-Executive Director, Promoter-
(Mr.) Director
Farrokh Ka ikhus hru Kavarana Non-Executive Director, Promoter-
(Mr.) Director
Ranja na Kumar (Mr.) Non-Executive Director
Vittal da s Leela dhar (Mr.) Non-Executive Director
Udi pi Mahes h Rao (Mr.) Non-Executive Director
Aja y Sha nkar (Mr.) Non-Executive Director
Ana lji t Singh (Mr.) Non-Executive Director
Ma llika Sri ni vas an (Ms .) Non-Executive Director
Peter Dylan Uns worth (Mr.) Non-Executive Director
Additional Disclosure
This report has been sponsored by NSE - Investor Protection Fund Trust (NSEIPFT).

Disclaimer
This report is based on data publicly available or from sources considered reliable. CRISIL Ltd. (CRISIL) does not represent that it is accurate or complete and hence, it should not be relied upon as
such. The data / report is subject to change without any prior notice. Opinions expressed herein are our current opinions as on the date of this report. Nothing in this report constitutes investment,
legal, accounting or tax advice or any solicitation, whatsoever. The subscriber / user assume the entire risk of any use made of this data / report. CRISIL especially states that, it has no financial
liability whatsoever, to the subscribers / users of this report. This report is for the personal information only of the authorised recipient in India only. This report should not be reproduced or
redistributed or communicated directly or indirectly in any form to any other person – especially outside India or published or copied in whole or in part, for any purpose.

CRISIL is not responsible for any errors and especially states that it has no financial liability whatsoever to the subscribers / users / transmitters / distributors of this report. For information please
contact 'Client Servicing' at +91-22-33423561, or via e-mail: clientservicing@crisil.com.

CRISIL COMPANY REPORT | 4