The Hindu Business Line : Tea stocks in demand on firm price trends

WITH tea prices firming up this year, stocks of companies in this business have also started attracting investors' interest. In today's trading, there was across-the-board buying in most of tea companies stocks.

Brokers and analysts said there has been upward movement in tea prices in the last few months and this should benefit tea companies.

According to Mr Nikhil Vora, Vice-President-Research, SSKI (a stock broking firm) "This year would be very good for tea companies in terms of profitability as tea prices are strong."

Some of the tea stocks that witnessed increased buying included Jayshree Tea (up 6.86 per cent at 70.90 on BSE), Assam Company (up 9.74 per cent at Rs 27.60), AFT Industries (up 6.68 per cent at Rs 79), Williamson Tea (up 7.40 per cent at Rs 123.35), Dhunseri Tea (up 11.27 per cent at Rs 16.80) and Williamson Magor (up 9.30 per cent at Rs 16.80). However, Tata Tea, the largest tea company stock was down 1.39 per cent at Rs 394.35.

Mr Vora said: "Mid-cap stocks have been performing well and so mid-cap tea companies are also attracting market attention."

According to industry experts, prices in the auction have shown an upward trend and this is likely to continue in remaining part of the year also. Moreover, exports of tea to Pakistan are also leading to rise in tea prices, analysts said.

"Increased demand and shortage in supply will benefit the companies both ways," said a broker. However, he said companies, which have their own tea gardens, are better placed.

Some of the companies which analysts feel are well placed to benefit include Tata Tea, Assam Company and Williamson Tea.