 "Tea planters in the Dooars region Photo: ISHITA AYAN DUTT")
Tea planters in the Dooars region Photo: ISHITA AYAN DUTT
Shares of tea manufacturing companies rallied up to 16 per cent on the BSE in Tuesday’s intraday on the back of rising tea price. Tea prices have been increasing due to erratic rainfall affecting tea production in North India.
Harrison Malayalam (Rs 247.95), Jay Shree Tea & Industries (Rs 131.70), and Rossel India (Rs 665) rallied 16 per cent each on the BSE in the intraday trade. Bombay Burmah Trading Corporation (BBTCL), on the other hand, hit a record high of Rs 2,323, soaring 15 per cent, while McLeod Russel India was locked in the 10 per cent upper circuit at Rs 32.36 on the BSE. In comparison, the BSE Sensex was up 0.39 per cent at 80,269 at 12:05 PM.
According to a Reuters report, tea prices have been soaring and are expected to stay high as heatwaves and floods during the peak harvesting season slash output in key producing regions.
The price rise could support the Indian tea industry, which has been struggling with rising production costs amid a negligible rise in tea prices in the past decade, the news agency reported.
Individually, shares of Harrison Malayalam (HML) hit a 52-week high of Rs 247.95 in the intraday trade, zooming 48 per cent in the past one month. HML is primarily engaged in cultivating and manufacturing tea and natural rubber.
Tea contributed to around 47 per cent of the total sales of HML in FY24 as against 46 per cent in FY22. HML has around 6,084 hectares of area under tea plantations, producing crush, tear, and curl (CTC) and orthodox tea varieties. HML also produces green tea and white tea in small quantities.
Tea production has witnessed improvement in FY24, when compared to FY23; but average tea price declined by Rs 10/Kg in FY24 for the company. Though tea cropping is expected at satisfactory levels in FY25, high production cost is expected to put pressure on profitability of the tea segment, CARE Ratings said in rationale.
Shares of BBTCL, the Wadia Group company, hit a record high of Rs 2,323 in the intraday trade today. The stock has zoomed 76 per cent from its previous month’s low of Rs 1,323, touched on June 4. The Corporation has tea and coffee plantations spread over four groups of Estates in Tamil Nadu and Karnataka.
BBTCL is converting its normal tea cultivation area into organic tea cultivation as there is a huge demand of organic tea in the international market and it fetches better realisation. Normal tea sells at Rs 115 per kg, while organic tea sells at around Rs 340 per kg. This will likely reflect an increase in yields from FY25 and would sustain over the medium term, according to India Ratings and Research (Ind-Ra).
First Published: Jul 09 2024 | 12:51 PM IST
