The high grown tea sector in Sri Lanka has performed well in this year’s first quarter compared to the same period last year with the average tea prices witnessing an increase of about 40% with tea firms such as Talawakelle Tea Estates (TPL) doing exceptionally well, analysts said.
“Since firms such as TPL are into high grown tea, the positive factors in the high grown tea sector in Sri Lanka would have resulted in the improvement in TPL's performance," Waruna Singappuli, Head of Research NDB Stockbrokers said.
He noted that from around Rs 260 per kg to Rs 360 per kg , tea prices saw a rise, which is a 40% increase in the prices during the last quarter.
Jaliya Wijeratne, Director SMB Securities noted that TPL has done exceptionally well in the last quarter recording a profit of Rs 59.6 million against a loss of Rs 33 million in the same period last year.
“Their earnings have been boosted by a 56% rise in revenue to Rs 685.8 million due to strong tea prices prevalent in the commodity markets. Gross profit has increased 225% year on year to Rs 136.3 million,” he said.
Charuka Suchendra, Research Analyst Asha Phillips said that TPL has benefited heavily from attractive tea prices recorded in the high grown tea in Colombo Tea Auctions. Mr. Singappuli also said that the tea volumes have increased from 14 million kg to 17.4 million kg(for the quarter), which is a 25% increase that has helped firms such as TPL to turn around.