Higher wage costs, lower price realisation add to tea companies' woes

Higher wage cost and lower price realisation weighed on the performance of tea companies in the three and nine-month periods ended December 31.

Both West Bengal and Assam hiked wage rates from June and October 2023, respectively.

Moreover, tea prices took a hit in 2023. This showed up on the financial performance of tea players.

For the nine months of FY24, most companies reported a sharp drop in profitability.

In Q3FY24, at least two listed tea producers, Goodricke Group and Dhunseri Tea reported losses. For McLeod Russel, the loss widened in Q3FY24 compared to Q3FY23.

ICRA senior vice-president Jayanta Roy