Tea major McLeod Russel India Ltd. has closed the second quarter with a 9% rise in net profit at ₹143.5 crore on higher prices. Crop remained stagnant for the quarter at 389 lakh kg.
However, staff costs increased by ₹17 crore on revision of wages and welfare costs. McLeod said that during the January to September period, its own production rose by 2.7 million kg as compared to last year, even as the contribution from the bought leaf factory was lower by 0.4 million kg during this period as compared to the year earlier.
McLeod has operations in Vietnam, Uganda and two companies based in Rwanda.
It said that aggregate overseas operations saw improved profitability during the first half of 2017. Through its gardens in Assam and Dooars in India, it produced 84.6 million kg last year with the output from the bought leaf sector, boosting its crop to 115.3 million kgs.
Giving an industry outlook, the company said in a release that the India production is expected to be lower during the first half, mainly due to lower production in North India. The Southern tea estates recovered from the effects of last year’s drought and total production is estimated at around 1200 million kgs.
Tea prices have increased in India this year, with improved demand in the domestic and export markets. The normal monsoon may boost rural demand, giving a further fillip to prices. But industry costs may also rise by an estimated 9% on higher wage and input costs.