Tata Coffee
The stock price of Tata Coffee yesterday moved like a yo-yo, from up to down, green to red. After hitting an intra day high at Rs.1154, anticipating bumper Q2 numbers, when the company reported a loss, the stock price tumbled down to the days low at Rs.1020. The numbers for Q2Fy14 were indeed disappointing. It posted a consolidated net loss at Rs.13 crore and this was thanks to the exceptional loss of Rs.91 crore. This exceptional loss comprised of a full provision of Rs 113.49 crore and net provision of Rs 90.86 crore was after adjusting forex fluctuation reserve of Rs 22.63 crore. The company has explained this loss stating that its US subsidiary CCI has invested in USA, a sum of US$ 220 million in a coffee business and US$ 22 million in a new line of business. It has identified the latter investment (US$ 22 million) for a full provision, as there is an other than temporary diminution in its value.
This exceptional loss apart, the overall performance was also disappointing. Its net income at Rs.455 crore was down 3% (YoY). EBIDTA was down 9% at Rs.73 crore. Its H1Fy14 net profit stands at Rs.27.50 crore, down 58%. In terms of segment breakup, all showed a fall in topline – coffee was down 2%, tea was flat, estate supplies was down 21% though in terms of EBIT, this segment showed a 41% jump. EBIT from coffee was down 2% and tea continues to remain in the red. Coffee accounts for 84% of the net revenue. Its cash balance as at 30th Sept 2013 has come down sharply to Rs.19 crore from Rs.55 crore (YoY).