Business Standard

Tata Tea Net Profit Dips 19.59% To Rs 100.21 Crore

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BUSINESS STANDARD

Tata Tea has reported a decline of 19.59 per cent in net profit to Rs 100.21 crore for 2000-01 compared with Rs 124.63 crore last year. Income from operations stood at Rs 841.32 crore, a decline of 8.72 per cent over 1999-00.

Homi Khushrokhan, managing director, said, "Sales have been lower because of proliferation of smaller regional brands in the organised segment and a drop in tea prices. Despite the total domestic market shrinking by 7-7.5 per cent, Tata Tea has maintained its market share."

According to analysts tracking the FMCG sector, the fourth quarter saw a drop of 7.3 per cent in sales with that of packaged tea declining by 7.1 per cent.

 

Operating margins has dropped from 16.6 per cent to 14.99 per cent, they said. Other income has decreased by 4.83 per cent from Rs 52.37 crore to Rs 49.84 crore.

"Increasing competition from other smaller and focused companies has led to reduction in the sales of Tata Tea and Hindustan Lever," analysts said.

Khusrokhan said the company was hoping a strong performance in bottomline for 2001-02. Total expenditure has decreased to Rs 718.14 crore against Rs 974.49 crore. Khusrokhan said, "We have maintained our costs and only staff costs has increased." Staff costs have increased from 209.53 to Rs 231.99 crore.

...Non-promoter stake declines

The Tata group stake in Tata Tea has declined by 3.5 per cent during the last fiscal to 26.5 per cent from 30 per cent as of March 31, 2000. Homi Khushrokhan, managing director, Tata Tea said, "There has been no intent to reduce stake. Because of the pounds 45 million global depository receipts issue last year, the group holding has marginally declined."

The issue was meant to fund the buyout of Tetley of UK, the world's second largest tea company, for pounds 271 million.

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First Published: Jun 20 2001 | 12:00 AM IST

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