Tata Global Beverages Ltd recently made an announcement it has signed a non-binding term sheet to acquire the branded tea business of Dhunseri Tea & Industries Ltd.
The deal value is up to Rs 101 crore ($14.5 million), the Tata Group company said in a stock-exchange filing.
The branded tea business of Dhunseri Tea is carried out under the brands “Lalghoda” and “Kalaghoda”. The two brands are among the leading local brands in Rajasthan, a market which is dominated by local players, Tata Global said.
Tata Global Beverages, a subsidiary of Tata Group, has posted 16.4 per cent year-on-year decline in consolidated profit after tax (PAT) at Rs 474 crore for the year ended March 31, 2019, earnings missed the estimates by weak retail demand due to adverse global and political scenario.
“The company’s consolidated PAT stood at Rs 553.50 crore in the year-ago period, Tata Global Beverages (TGBL) said in a statement.
Revenue from operations for the fiscal slippage was reported 6.4 per cent to Rs 7,252 crore as compared to Rs 6,815 crore in the previous year.
For the financial year 2019, the company’s operating profit (EBITDA) also fell to Rs 838 crore as compared to Rs 851 crore in FY18.
The company reported a 49.70 per cent decline in consolidated net profit at Rs 35.99 crore for the fourth quarter ended March 31, 2019, as compared to Rs 71.56 crore in the year ago period, weighed down by Lower sales in US Coffee and Tea.
“Group net profit for the quarter and full year is lower mainly due to higher exceptional items, higher share of losses from JVs and associates and higher one-time tax credits in the previous year,” the company said.
Commenting on earnings, Ajoy Misra, Managing Director and CEO of Tata Global Beverages said “The Company has posted steady revenue growth in the last year. Profits have been impacted due to one off items, commodity costs and increased brand investment.”