Tata Tea Market Cap Rises 950% During Last Month

Despite the gloom in the tea industry, Tata Tea's market capitalisation increased 950 per cent in the last one month.

The Tata Tea scrip was quoted at Rs 129.25 on October 12. Up to 17,300 shares worth around Rs 2 crore were traded that day.

The scrip closed at Rs 178.15 on the Bombay Stock Exchange (BSE) today. The volume too was significantly higher with 1,31,877 scrips worth Rs 23 crore changing hands.

The Tata Tea scrip jumped from Rs 139.5 on October 31 to Rs 152.65 on October 31 and then to Rs 161.4 on November 1. Volume too increased from 1,13,481 on October 31 to 3,78,137 the next day.

Rumours have been floating in the markets that Tata Sons is increasing its stake in the company. However, Tata Tea vice-chairman R K Krishnakumar, dismissed the rumours and said that investors have realised that the stock is undervalued.

Krishnakumar added that Tata Tea's financial performance vis-a-vis other tea companies has been very good. It has outperformed most tea and beverage companies, he noted.

In contrast, the Goodricke scrip closed at Rs 30.5 on October 12, and at Rs 30.10 today. The Warren scrip declined 7.98 per cent to close at Rs 75 today. Up to 4,500 scrips changed hands today.

The scrip closed at Rs 63.35 on October 12. Rossell Industries, which closed at Rs 117 today was quoted at Rs 116 on October 12.

An analyst tracking Tata Tea said the benefits from the operational integration of Tetley with Tata Tea in the near future is pushing the scrip northwards.

To maximise benefits from the integration, Tata Tea has appointed the Boston Consulting Group (BCG) to pen the integration plan.

The study is an ongoing process and will be conducted in phases. Tata Tea is also planning to launch Tetley products in the domestic market.

Meanwhile, tea exports in the third quarter ending September this year dipped 9.92 per cent to 133.23 million kg from 148.02 million kg between January-September 2000.

Exports during September was down 16.88 per cent to 16.54 million kg from 19.90 million kg during the same period last year.

Production between January-September increased marginally by 1.66 per cent to 633.83 million kg.