Helped by higher branded tea sales, one-time gains
Mumbai, Nov. 1
Tata Tea Ltd said its consolidated net profit for the second quarter of the current fiscal grew 92 per cent, as it made one-time gains and registered higher branded tea sales.
Its consolidated net profit for the quarter amounted to Rs 194 crore (Rs 101 crore).
This is inclusive of exceptional income of Rs 66.96 crore, representing profit from sale of investments.
Income from operations grew 25 per cent to Rs 973.96 crore (Rs 778.81). Net income from investments grew 114 per cent to Rs 40.98 crore (Rs 19 crore), so that total income grew 27 per cent to Rs 1,014.9 crore (Rs 797.9 crore).
Brand volume growth was 9 per cent, said Mr L.K. Krishnakumar, Senior Vice-President, Finance & IT, Tata Tea Ltd.
Costs were kept under check, he added. Staff costs were almost unchanged at Rs 50.55 crore, while advertising costs rose modestly to Rs 26.06 crore (Rs 22.69 crore). But raw material costs increased, putting pressure on operating margins as the cost is passed on to the customer in a staggered manner, he said.
Profit before interest and depreciation was Rs 221 crore (Rs 180.6 crore).
Interest costs almost doubled to Rs 47.15 crore (Rs 24.36 crore), on account of the company servicing debts to fund its acquisitions, said Mr Krishnakumar.
Teltey Group, the wholly owned UK subsidiary, reported a decrease in profit at Rs 18.75 crore (Rs 28.31 crore) on an 11 per cent increase in revenues at Rs 542 crore. Its lower profitability reflects higher promotional costs and higher interest costs due to recent acquisitions, said a statement from the company.
On a standalone basis, the company reported a 160 per cent increase in profit after tax, at Rs 164 crore and a 7 per cent increase in income from operations at Rs 274 crore (Rs 255 crore).
Tata Tea shares ended the day down at Rs 760.25 on the BSE against Tuesday's close of Rs 764.25.
Tata Tea said it is divesting its North India plantation operations into a separate company, inducting several new stakeholders, the dominant ones being IFC, Washington and ILFS and Globally Managed Services (GMS).
The divestment is at a transaction value of Rs 359 crore, said Mr Percy Siganporia, at a news conference here.
IFC and IL&FS will each hold the same equity stake as the Tatas, said Mr L.K. Krishnakumar, Senior Vice-President, Finance & IT. There are going to be other stakeholders as well, whose names will be disclosed later, said officials.
The plantations (over 24,000 hectares) together brought in revenues of Rs 224 in the previous year. They employ 31,800 persons. Employees and staff will get equity stake in the company, and will be given interest-free loans with fortnightly repayments being as little as Rs 50, said Mr Siganporia.Related Stories:
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