| However , this is because of forex losses as also the exclusion of revenues from the south Indian plantations that it sold off. |
| Tetley has grown at around 5.5 per cent (exclusive of revenues from Good Earth) and has managed to hold on to, or grow its share in all the markets that it has a presence in. |
| Its operating profit, however, remained flat though the operating cash flows were up over 13 per cent. In India, Tata Tea has grown volumes at 8 per cent and has gained market share "" up 20.6 per cent up from 19.8 per cent a year ago. |
| Consolidated operating profit has remained flat at Rs 562.5 crore as has the operating profit margin at 18 per cent. The profit after tax of Rs 300.54 crore, up 37 per cent y-o-y, has been boosted by lower interest costs and exceptional income. |
| In the international markets, Tetley continues to launch new products, such as ice and herbal teas besides, introducing new packaging. |
| It is also pursuing acquisitions "" during the year it took over Good Earth in the US and Czech-company Jemca. |
| The latter has a 27 per cent market share and will give Tetley a manufacturing base and some distribution clout. It also continues to explore markets such as Russia where it is test marketing its teas. |
| In India, it managed higher realisations for some products, while tea bags clocked double-digit sales growth, and commands 30 per cent market share. The recent increase in the price of Tata Gold by Rs 8 a kg is a sign that the company has the pricing power. |
| At the current price of Rs 625, the stock trades at 11 times estimated FY07 earnings and 9.5 times estimated FY08 earnings. |
| Besides, there is the value of investments which would work out to around Rs 40-50 a share. The stock is attractively valued given the consumption boom in India and the potential to grow market share. Even in the international market, there is ample scope for Tetley to increase its presence. |
| Sun Pharma: Betting on buyouts |
| Sun Pharma's consolidated operating profit (excluding other income and net interest income) has grown 19.5 per cent y-o-y to Rs 497.4 crore in FY06, as compared to a 38 per cent growth in net sales to Rs 1635.4 crore. |
| However, the consolidated operating profit margin fell 474 basis points to 30.41 per cent in FY06. |
| Company management explained they had made several acquisitions in FY06, including the US-based Able Labs and two manufacturing facilities overseas, for which the company incurred expenditure, and as a result, the results for FY06 are not strictly comparable with those of last year's. |
| In addition, its margin in FY06 was also affected by pricing pressures in the key US generics market. Sun's results were announced on Tuesday after the markets closed, and the stock fell 5.5 per cent to Rs 721 on Wednesday. |
| However, prior to that, the stock has fallen nearly 4.75 per cent over the past four months as compared with a 1.2 per cent fall in the Sensex. Sales growth in FY06 has been largely powered by a 41.2 per cent y-o-y growth in domestic formulation sales to Rs 959.5 crore. |
| The company management highlighted improved demand for medications in segments like cardiology, ophthalmology and diabetes segments. |
| Meanwhile, in the March 2006 quarter, its operating profit margin fell 675 basis points y-o-y to 23.92 per cent. |
| Going forward, Sun is expected to focus on deriving greater synergies from its recent acquisitions. |
| Earlier, the board had decided to de-merge its innovative R&D business (comprising new drug development systems) with effect from April 1, 2006, subject to necessary approvals, and it will be transferred to Sun Pharma Advanced Research Company Ltd, a wholly owned subsidiary. |
| The stock trades at about 21 times estimated FY07 earnings, which excludes the impact of the demerger of its R&D business. |
| With contributions from Shobhana Subramanian and Amriteshwar Mathur |
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