Expect sugar biz to be demerged by Sept 1: Jayshree Tea

Jayshree Tea & Industries' revenue from the tea segment stood at Rs 150 crore in the third quarter ended September. Speaking to CNBC-TV18, DP Maheshwari, MD & CEO of the company, talks about the company's third quarter performance and future outlook. Below is the verbatim transcript of DP Maheshwari’s interview with Surabhi Upadhyay on CNBC-TV18.Q: Can you break down this performance and just run us through how both divisions have done starting with tea and of course sugar as well? A: As you can see, the tea results are quite good. In spite of market being down by almost Rs 3-4 a kilo and crop also being down overall for the country as a whole, we have performed quite well. This is in spite of the fact that two of our regions, Darjeeling and South India, are as a whole not doing very well. The industry there is in a real dire state.However, all other areas, like Cachar, Doars and Upper Assam have done well. So, our overall figures are higher by Rs 2 crore for tea. This apart, this year we have changed the stock valuation system so there is a hidden gain of around Rs 8 crore which we are carrying forward for the next quarter. Q: Let me just quickly clarify that, so there is an additional income hat you have got of Rs 8 crore because you have changed the manner in which you are valuing your stock is that right?A: Yes, so, the stock valuation is low. Last year it was done on an estimated cost and this year it is done on a actual cost. So, that difference is there, that is why in the last quarter my profit will be higher by Rs 8 crore or whatever loss we have will be reduced by Rs 8 crore. Overall situation is very good as far as tea is concerned.Q: I don’t have the exact segment breakup; can you give me the tea revenue? What is the revenue that you have clocked for the tea business, it was close to Rs 146 crore last year? A: Tea revenue instead of Rs 146 crore, it is Rs 150 crore. Profit is up by Rs 2 crore. Q: Can you just run us through what your outlook is on pricing as well; are you expecting a further increase and what is your volume outlook looking like for the second half of the year? A: In the last quarter, we expect prices to be better than what they were year-on-year (YoY) last year. When the new season tea appears sometimes in March, I expect the market to be higher by at least Rs 20-25 a kilo for the simple reason that production is behind by 12 million kilograms ending November and December also it will be low. Exports are slightly higher by around 5 million kilogram and every year the demand goes up by 25-30 million kilogram. So, overall, there will be less availability of tea by at least 35-40 million kilogram. I expect market to open very strong sometimes in March and for January-March whatever sales, already January is more or less over, the YoY sale average for every week is higher than last year.For entire discussion, watch accompanying video...