Jay Shree Tea & Industries Limited has announced that Care Ratings Ltd. has reaffirmed its credit rating of BBB-/Stable/A3 with a stable outlook, valid for a period of one year. The rating encompasses the company's total facilities worth ₹376.25 crores, demonstrating the rating agency's confidence in the tea manufacturer's financial stability and operational capabilities.

Credit Rating Details

The comprehensive rating covers both fund-based and non-fund based facilities across the company's operations:

Key Rating Factors

Care Ratings based its assessment on several fundamental strengths of Jay Shree Tea Industries. The rating agency highlighted the company's strong promoter group backing and diversified revenue profile as primary positive factors. The assessment also recognized the company's adequate capacity utilization levels and established market presence.

The company's strong brand recognition in the bulk tea segment, covering both CTC and orthodox varieties, along with its fertilizer business operations, contributed significantly to the rating decision. This diversification across tea processing and fertilizer manufacturing provides operational stability and revenue stream diversification.

Financial Performance Recognition

A crucial element in the rating reaffirmation was Care Ratings' acknowledgment of Jay Shree Tea Industries' improved financial performance during FY25. The rating agency specifically noted the sustenance of this improved performance trajectory in H1FY26, indicating consistent operational efficiency and financial management.

The stable outlook assigned by Care Ratings reflects the agency's expectation that the company will maintain its current financial and operational performance levels over the rating period. This assessment provides stakeholders with confidence in the company's near-term financial stability and operational capabilities in both the tea and fertilizer segments.

Jay Shree Tea & Industries has released its quarterly results for the period ended September 30, 2023, revealing a mixed performance across its diverse business segments. The company's financial report highlights strong growth in its tea segment, offset by losses in the sugar division, while also shedding light on its fertilizer manufacturing operations.

Segment-wise Performance

The tea segment emerged as the star performer, generating a substantial revenue of ₹16,688.00 lakhs and contributing a profit of ₹3,491.00 lakhs. In contrast, the sugar segment faced headwinds, posting revenue of ₹6,405.00 lakhs but incurring losses of ₹666.00 lakhs. The P&K Fertilisers manufacturing division added ₹3,260.00 lakhs to the revenue stream with a profit of ₹311.00 lakhs.

Overall Financial Performance

Jay Shree Tea & Industries reported total revenue from operations of ₹26,353.00 lakhs for the quarter. The company's net profit from continuing operations stood at ₹1,905.00 lakhs, demonstrating its ability to maintain profitability despite challenges in certain segments.

For the half-year period, the company's total revenue reached ₹45,045.00 lakhs, indicating a robust performance in the first half of the fiscal year.

Dividend Announcement

The Board of Directors approved a final dividend of ₹0.50 per share for the financial year 2022-23. This dividend was paid out on August 19, 2023.

Auditor's Concerns

It's important to note that the company's auditors have raised concerns regarding the non-provisioning of income tax liability during the quarter. The auditors stated that this practice does not comply with accounting standards, which could potentially impact the company's financial reporting and compliance status.

Conclusion

Jay Shree Tea & Industries' Q2 results paint a picture of a company navigating both opportunities and challenges across its diverse business portfolio. While the tea segment's strong performance has helped offset losses in the sugar division, the company may need to address the concerns raised by auditors to ensure full compliance with accounting standards moving forward.