As tea goes pricey, high bottomline is a sure: Jayshree Tea

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As tea goes pricey, high bottomline is a sure: Jayshree Tea

With the rising tea prices that continue to increase for the third consecutive week, DP Maheshwari, managing director of Jayshree Tea says the bottom-line of the company is bound to ‘grow’ the company’s bottom-line.

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With the rising tea prices that continue to increase for the third consecutive week, DP Maheshwari, managing director of Jayshree Tea says the bottom-line of the company is bound to 'grow' the company's bottom-line. In an exclusive interview with CNBC-TV18, Maheshwari observes "the tea prices have moved up by Rs 15 per kilogram over what they were during the same period in last year."

He further says that the company's projects in the pipeline include the ones to raise power capacity as well and to set up a distillery.

Below is a transcript of DP Maheshwari's interview with CNBC-TV18. Also watch the accompanying video.

Q: Could you tell us what benefit that would have on your realizations particularly for the first quarter where does it stand at?

A: The price increase and volume is already fixed, the production levels more or less are the same. Therefore, the price rise is welcome and the bottom line definitely will grow up.

Q: How much has it gone up by in this quarter? What is the increase in realization?

A: If you take the year as a whole, around the prices have moved up by Rs 15 per kilogram over what they were during the same period in last year.

Q: There are some reports doing the rounds that you are planning to raise your power capacity as well and you are planning to set up a distillery for ethanol. Can you just take us through it?

A: We haven't completed a year after having taken over the operations. We want to wait to observe the industry behaviour. However, we would like to expand our captive power as well as maybe once we have the capacity, go for the distillery, however, not immediately.

Q: How much would you be looking to invest in these opportunities, going forward?

A: We will increase our power capacity to around 22-25 kVA. We already have around 6 kVA, therefore, it works out roughly at around Rs 100 crore or so.

Q: How exactly would you be funding this Rs 100 crore?

A: It will mostly be internal accruals.

Q: Can you give us an update as how MP Chini Industries is doing since you acquired the company about a year back?

A: MP Chini Industries is no different from the sugar industry as a whole. The prices now are not all that bright and it is not even breaking new level. However, these prices that are actually unnatural cannot remain. Sugar is the only commodity where prices are much lower than what they were last year.

Q: When would MP Chini breakeven and how much would it contribute to your revenue and EBITDA on a consolidated basis?

A: We will be coming up with the amalgamated balance sheet. Last year, we made around Rs 9 crore or so in MP Chini. For this year, we will definitely breakeven or maybe make a small profit.