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Tea prices jump 20% YoY as extreme weather hit production: Top tea companies to watch out
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4 min read | Updated on July 21, 2024, 12:49 IST
SUMMARY
India's tea prices are rising due to adverse weather impacting production in key regions. Extreme heat and floods have significantly reduced output, keeping prices high. Major tea companies like Tata Consumer Products, Rossell India, CCL Products and Bombay Burmah Trading Corporation are likely to be impacted.
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India's tea prices rise as extreme weather hits production: Top tea stocks set to benefit
India’s tea industry is reeling under inclement weather conditions, which majorly hit production in most tea-growing areas. Extreme heat waves and floods during peak season have jeopardized output. As a result, tea prices in India are rising and are likely to remain elevated, according to a report by Reuters.
"Extreme weather events are hurting tea production. Excessive heat in May, followed by ongoing flooding in Assam, are reducing output," apprised Prabhat Bezboruah, a senior tea planter and former chairman of India's tea Board.
According to a report by the Tea Board, average tea prices surged to ₹217.53 ($2.61) per kg in the last week of June, marking a nearly 20% increase from a year before.
The weather has always been instrumental in achieving optimal tea production during peak seasons, governing price movements. Despite this, India is also a major tea exporter.
According to the Commerce Ministry's data, the country's exports in the first four months of 2024 soared by 37% from the previous year, reaching 92 million kg.
Amid this discussion, let us look at the top tea companies listed in India and track their recent performances:
Tata Consumer Products Ltd
The company’s revenue in the March 2024 quarter was ₹3,927 crores, up 8.25% from the same period the year ago. However, the net profit saw a 19.35% dip YoY at ₹212 crores.
Tata Consumer Products shares have gained around 9.3% year-to-date. The company’s closed at ₹1,187 per share. The 52-week high price was ₹1,269 on March 11, 2024, and fell to its 52-week lowest price at ₹825.
Bombay Burmah Trading Corporation
The ₹14,834 crore market cap company posted revenue of ₹4,162 crores in the quarter ending March 2024, which is a 1.10% up from the year-ago quarter. Its net profit in the March quarter of fiscal 2024 was ₹526 crores.
Shares of Bombay Burmah Trading Corporation have gained around 35% year-to-date. The previous close price of its stock was ₹2,134 as of July 21, 2024. The 52-week highest price of the stock was on July 9, 2024, at ₹2,408.00, and it dropped to its 52-week lowest price of ₹970.05 on August 30, 2023.
CCL Products India Ltd
CCL Products posted revenue of ₹727 crores in the March quarter of 2024, a growth of 39.91% from the same quarter of FY23. However, its net profit of ₹65 crore in the reported quarter of 2024 was down over 23.5% compared to the same period a year ago.
CCL Products' shares slumped 8.2% YTD. They reached a 52-week high of ₹688 on July 14, 2023, and tanked to their 52-week lowest price of ₹551.60 on May 22, 2024.
Rossell India Limited
The ₹2,301.75 crore market cap company posted revenue of ₹68 crore in the quarter ending March 2024, up 0.36% YoY. However, it reported a net loss of -14 crore during the same period.
Rossell India Limited shares have gained over 20% year-to-date. The company’s closed at ₹566 per share. The 52-week high price was ₹664.40 on July 9, 2024, and fell to its 52-week lowest price at ₹341.60 on March 13, 2024.
The production hit due to climate conditions is still relevant, and it is to be seen how tea prices move in the coming days and how companies deal with it.
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