JAY SHREE TEA - BUY

Jay ShreeTea is a member of BK Birla group and one of the largest tea producers in Asia. In addition to 10000 hectare tea estates  at various parts of India ,company recently acquired some plantations in African countries.Currently company  having 22 tea estates in India and 3 abroad. Company also producing Single Super Phosphate , Sulphuric Acid and Sugar .Its sugar factory is located in Bihar with  a capacity of 5500 TCD. Company’s tea brands are Kanchenjunga, Classic Pure, Golden Caddy, Sadabahar, Shaandar, Kalline Gold and Jaandar. Due to lower tea prices and even lower sugar prices company posted very bad numbers in last quarter. It could not pass the effects of increased input costs and labour costs to its customers mainly because of the over supply situation in world tea markets. But this situation is expected to change in the upcoming season .Supply shortage is expected in India due to adverse weather conditions in next season which will begin in March.India’s tea consumption is increasing in an average rate of 3-4 % per year  but no significant addition in tea plantations.Entry of bigger brands like Starbucks to India  is expected to change the tea consumption culture of Indians going forward. Tea prices in world market is also expected to improve due to production shortage in Kenya .This big producer  has lost a significant part of its tea production this year due to severe frost in key growing areas.All these factors are expected to lead an increase  in Tea prices in the new season even in world tea markets.In the case of sugar , it already bottomed out and trading even below its  production cost .Some positive steps are expected from government side to save this industry in near future. After a short period of decline in Tea prices and a long period of fall in Sugar prices both these commodities are expected to rebound shortly .Jay Shree tea is one of the best choice available due to its presence in both these sectors .Medium to long term investors may consider it @ CMP of Rs.91/-