Jay Shree Tea sees Rs 10cr profit boost post MP Chini union

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Jay Shree Tea sees Rs 10cr profit boost post MP Chini union

Jay Shree Tea is merging its sugar manufacturing subsidiary, M P Chini Industries, with itself. DP Maheshwari, managing director of Jayshree Tea said that once the amalgamation of the tax plays out, a turnover of Rs 100 crore is not ruled out.

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Excerpts from Midcap Radar on CNBC-TV18 Watch the full show » ALSO READ See latest News about Jayshree Tea See previous management interviews See what other Experts & Brokerages are saying about Jayshree Tea Jayshree Tea BSE | NSE 31/05/12 Are Mutual Funds betting on Jayshree Tea?

Jay Shree Tea is merging its sugar manufacturing subsidiary, M P Chini Industries, with itself. DP Maheshwari, managing director of Jayshree Tea said that once the amalgamation of the tax plays out, a turnover of Rs 100 crore is not ruled out. 

On the company's FY12 guidance, he told CNBC-TV18, "the picture for next fiscal looks robust. We expect to produce 270 lakh kilogram of tea, as against 241 lakh kilogram in the last year."

Below is a verbatim transcript of the interview. Also watch the attached videos 

Q: Your company's board is considering amalgamation of MP Chini and Parvati tea. Can you tell us how your turnover and profitability would increase after the merger?

A: Our unaudited results have already been published.  The overall turnover is around Rs 459 crore for the standalone company. Once amalgamation of the MP Chini Mill tax plays out, the turnover should rise by Rs 100 crore and profitability by around Rs 10 crore. As far as Parvati Tea is concerned, it will continue to remain a separate entity. We will only demerge some of our investments in that company and through that only we will be controlling it.

Q: Earlier, you consolidated overseas subsidiaries like Birla Holding & Revanda. On that account, how do you expect profitability to fair?

A: According to foreign operations, profitability should go up by around Rs 10 crore and turnover by approximately Rs 25-30 crore. The figures will come out when the consolidated balance sheet is published in September.

Q: Your company reported loss in standalone numbers-Going forward, what do you expect on tea realisations and also the volume growth?

A: For FY12, the picture is robust because market is responding quite well. Last year, only quality producing area, like Assam, prices were high.  In common average quality producing area like South India, the prices were down. This year, from the beginning, prices of these areas except South India is high, so we expect much better results in FY12. As regards to turnover, it will go up because productions increase. Last year we produced around 241 lakh kilograms in India, which is expected to go up to 270 lakh kilograms in the current fiscal.