In Tuesday's intraday trading, shares of tea manufacturing businesses surged up to 16 percent on the BSE due to surging tea prices. Because North India's tea output is impacted by unpredictable rains, tea prices have been rising.
Three stocks had significant intraday gains on the BSE: Harrison Malayalam (Rs 247.95), Jay Shree Tea & Industries (Rs 131.70), and Rossel India (Rs 665). McLeod Russel India remained caught in the 10 percent upper circuit at Rs 32.36 on the BSE, while Bombay Burmah Trading Corporation (BBTCL) soared 15 percent to a record high of Rs 2,323. The BSE Sensex, in contrast, was up 0.39 percent at 80,269 at 12:05 PM. As output in important producing regions is reduced by heatwaves and floods during the peak harvesting season, tea prices have been rising and are predicted to remain high, according to a Reuters article. Furthermore, according to the news agency, the price increase may help the Indian tea sector, which has been having trouble keeping up with growing production costs despite a very little increase in tea prices during the previous ten years.
In intraday trading, Harrison Malayalam (HML) shares individually reached a 52-week high of Rs 247.95, soaring 48 percent over the previous month. HML is mostly involved in the production of natural rubber and tea. Compared to 46% in FY22, tea accounted for around 47% of HML's total sales in FY24. Tea plantations of over 6,084 hectares are located in HML, where orthodox and crush, tear, and curl (CTC) tea varieties are grown. White tea and green tea are also produced in modest amounts by HML.
While tea output increased in FY24 compared to FY23, the company's average tea price decreased by Rs 10/kg in FY24. CARE Ratings provided a justification for their prediction that, despite tea planting being predicted to reach reasonable levels in FY25, high production costs will likely limit the tea segment's profitability.
In intraday trading Wednesday, shares of the Wadia Group firm BBTCL reached a record high of Rs 2,323. The stock has surged 76% from its June 4 low of Rs 1,323, which was reached last month. The Corporation owns and operates plantations of tea and coffee in four groups of estates in Karnataka and Tamil Nadu.
Due to the high demand for organic tea on the global market and its higher realization, BBTCL is transforming its regular tea growing area to organic tea production. Organic tea costs about Rs 340 per kilogram, whereas regular tea costs about Rs 115. India Ratings and Research (Ind-Ra) predicts that this will continue over the medium run and will probably represent a rise in yields from FY25.
