According to the company, considering that its business of manufacturing and marketing of black tea is seasonal in nature and as such the results for the quarter should not be construed as indicative of the likely results for the financial year ending March 2000.

``In line with the all-India production and price trends, income from the company's operations as well as the profit for the first quarter are lower due to a substantial decline in production of tea because of adverse weather conditions accompanied by depressed prices due to significant decline in exports,'' the company said.

Further, it added that last year's first quarter results benefitted from exceptionally high production and prices.

Duringthe quarter under consideration, operating profit suffered a 28.8 per cent drop to Rs 48.31 crore from Rs 67.93 crore last year. Margins have contracted with the operating profit margins declining to 22.60 per cent from 30.23 per cent last year. Net profit margins too have dropped to 12.21 per cent from 17.40 per cent in the previous period.

At the Bombay Stock Exchange, the Tata Tea scrip closed at Rs 382.10 after opening at Rs 386.05. Interest burden has eased marginally at Rs 5.05 crore against Rs 6.01 crore in the previous quarter. Depreciation was marginally higher at Rs 4.72 crore as compared to Rs 4.05 crore. Provision for taxation was lower at Rs 12.60 crore as against Rs 19.10 crore last year.

INSIGHT
No cause for worry

The first quarter results have been bad because of the drought in North-East India during the first flush, while prices too have been lower than last year. South India tea prices have also fallen because of lack of Russian buying. Exports have been hit. Althoughthe first quarter results are no indication of full year performance, prices are still much lower than last year. And the lower crop is unlikely to be made up in the rest of the year. The silver lining for Tata Tea is its presence in packet tea, which should cushion it from sharp price declines.

-- Manas Chakravarty