Jay Shree Tea & Industries Ltd Management Discussions

OVERVIEW

The tea production in India has increased by 2% from 1340 mn kg to 1368 mn kg. The crop of Cachar, Assam and South India was lower whereas crop of Dooars and Terai were higher. Your Company produced 152.07 lakh kg. of tea against 159.72 lakh kg. last year. Out of this your own crop was 143.16 lakh kg against 146.13 lakh kg. The bought leaf production was curtailed from 13.59 lakh kg to 8.91 lakh kg in view of high cost of green leaf and reduced margin.

SEGMENT ANALYSIS AND REVIEW

The Company is engaged in the manufacture of tea, sugar and chemicals & fertilizers besides tea warehousing and investment activities. Tea accounts for 55.81 %, sugar accounts for 27.59 % and chemicals & fertilizers 16.60 % of the gross turnover during 2023-24.

TEA

Your Companys district wise production compared to All India production is enumerated below:

* All India figures on calendar year basis and estimated for 2023

** The above production includes tea manufactured from bought leaf.

District wise price realised by the Company for own produce compared to previous year is as under:

OUTLOOK

The total Indian tea market is estimated to be worth Rs 31,000 Crores, with the branded business constituting 75% of the overall market (by value). Tea is most favourite and cheapest beverage with consumer preference of boiled milk tea with ginger and cardamom. There continues to be a strong consumer focus on Health & Wellness/ immunity and transparency on ethical and sustainable sourcing credentials. Ecommerce continues to be an emerging growth channel.

Strengths

• Leading quality tea producer with strong distribution network

• Bagicha-by Jay Shree Tea is providing garden fresh teas to consumers

• Strengthening back-end operations with a number of initiatives including network expansion to support growth ambitions and driving cost efficiency with digitization

• Leveraging Birla Brand name as it inspires trust into categories of mass consumption

REVIEW OF OPERATIONS

The recovery in sugar season 2023-24 was 9.80%compared to 9.60% in the previous year i.e an increase of 0.20%. The Company continued with its cane development work and enthused farmers to cover further areas under autumn planting to increase the availability of sugarcane in the coming season. The unit had set up a sugar refinery project to refine the sugar as well as to run the ethanol plant to its full capacity of 330 days a year.

OUTLOOK

With increased production of ethanol the outlook looks positive.

Strengths

• Encouraging long term Government policy on increasing the use of ethanol in Indias vehicular fuel mix ^•

• Ethanol prices delinked from crude or petrol prices and price of sugar and FRP of sugarcane considered for its fixation by the Government every year

Threats

• Lower availability and diversion of cane, reducing availability of molasses

CHEMICALS & FERTILISERS REVIEW OF OPERATIONS

"Annapurna" brand of Single Super Phosphate (SSP) is one of the first choice of farmers in West Bengal for increasing their crop. Your Company is trying to increase its market share by maintaining very high standard of quality.

OUTLOOK

Unprecedented heat wave and deficient monsoon in West Bengal affected the sale of Single Super Phosphate which declined by 21% over 2022-23. Adding to the woe was reduction in subsidy by the Government in mid-season by Rs. 3332/- per tonne, which has now been revised by Rs. 1264/- per tonne w.e.f 01.04.2024. Your Company takes farmers friendly measures to improve the availability of SSP in all areas.

OPPORTUNITIES AND THREATS Strengths

• Annapurna SSP is the best quality of SSP made available to farmers in West Bengal

• Cheapest fertilizer available for the agriculture sector Threats

• Continuing price disparity between urea and phosphatic fertilizers resulting in imbalance use of fertilizer.

DISCUSSION ON FINANCIAL PERFORMANCE WITH RESPECT TO OPERATIONAL PERFORMANCE

The Company continuously monitors its debt position and working capital utilization. It has strict check on capex to save interest. These measures are yielding good results.

HEALTH, SAFETY, SECURITY AND ENVIRONMENT

Health, safety, security and environment (HSSE) is a key priority for the Company. We are committed to the safety of our people and assets and towards the protection of the environment. Your Company follows industry-accredited best practices in health, safety, and environment related aspects to constantly set higher benchmarks and strives to exceed the same.

The fertilisers factories of your Company are following full Environment Management System and Occupational Health & Safety Management System.

All the tea estates follow green environment policy. Afforestation is being carried out on regular basis.

DEVELOPMENT IN HUMAN RESOURCES MANAGEMENT

As we seek to accelerate our journey to becoming a premier organization, our integrated People agenda is focused on shaping a Future-Ready organization that delivers value, without compromising on our core Values.

Training on job is an essential part of your Organization.

Tea industry is highly labour intensive and your Company considers people as its biggest assets. With regular communication and sustained efforts, it ensures that employees are aligned on common objectives and have the right information on business evolution.

The total number of people employed in your Company as on 31st March, 2024 was 19402.

CAUTIONARY STATEMENT

The statements in the report of the Board of Directors and the Managements Discussion and Analysis report describing the companys projections, estimates, expectations or predictions may be forward looking statements within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied since the Companys operations are influenced by many external and internal factors beyond the control of the Company. Further tea and chemicals industries depend upon the vagaries of nature and any adverse/ favourable situation can change the whole situation.