MUMBAI, JAN 25: Tata Tea Ltd has reported a slump in net profit in the third quarter ended December 1998, even as its net profit increased by over 50 per cent in the nine-month period ended December 1998. The company has posted a 10.13 per cent drop in net profit in the third quarter to Rs 28.10 crore as against Rs 31.27 crore in the corresponding period last year. Income from operations during the period too dropped marginally to Rs 204.16 crore from Rs 212.83 crore last year. Income from operations in the coffee export trading business was nil in the third quarter as against Rs 16.13 crore in the same period last year.Net profit margins at 13.76 per cent slumped from 14.69 per cent in the same period last year. Operating profit margins dropped to 23.77 per cent from 25.39 per cent last year. Operating profit decreased 10.2 per cent to Rs 48.53 crore from Rs 54.05 crore in the same period last year.Interest costs dropped to Rs 4.49 crore from Rs 5.35 crore last year. Depreciation was more or lessthe same at over Rs 3 crore while provision for taxation was lower at Rs 12.25 crore from Rs 14.65 crore last year.Net profit during the nine-month period ended December 1998 increased 50.18 per cent to Rs 122.52 crore from Rs 81.58 crore in the corresponding period last year. Income from operations during the period dropped marginally to Rs 644.23 crore from Rs 659.63 crore last year. Net profit margins increased to 19 per cent from 12.36 per cent in the corresponding period last year. Operating profit jumped 46.69 per cent to Rs 192.22 crore from Rs 131.03 crore last year. Operating profit margins were higher at 29.83 per cent as against 19.86 per cent in the previous year. Depreciation was higher at Rs 12.53 crore as against Rs 10.71 crore last year. The provision for taxation increased to Rs 54.75 crore from Rs 29.75 crore last year.The Tata Tea results were below market expectations. For the nine months ended December 1998, the expectation was a net profit of Rs 140-150 crore. The stockvaluation reflected this, especially considering that domestic tea exports were higher by 20 per cent in the second half. Against these expectations the company reported a net income of just Rs 123 crore, leading to a sell-off at the counter. The stock hit the lower end of the circuit during trading on Monday, as the market understandably reacted negatively.
