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Diana Tea Company


Diana Tea Company supplies tea, primarily to the premium market segments.

Indians are paying up for quality tea in increasing numbers. Domestic consumption is expected to grow at 3% compounded without including price increases.  The company is also performing development work on its tea gardens with a priority to improving quantity and quality of tea.

The company reported good growth in revenues and operating profits over the last five years – reporting about 11cr of operating profits on revenues of about 62cr in the last financial year.  It employed a moderate debt load to finance its operations.

The business is primarily exposed to uncertain weather conditions, droughts, pest attacks etc.  Moreover, tea prices are vulnerable to world tea crop oversupplies (primarily in Sri Lanka, Kenya etc.).  Further, the business is labour intensive and hence, the company is heavily exposed to wage hikes.

The company does receive subsidies from the Tea Board for orthodox tea manufacturing and exports, leaving it exposed to future reductions in subsidies.  Also, the company sells a lot of tea to the Middle East region and political unrest there could prove detrimental to revenues.  

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