Bangalore, Oct. 1 - Tata Tea Ltd. does not see a negative impact on results from the appreciation of the rupee against the dollar, Managing Director Percy Siganporia said Monday.
"There has been no material impact on Tata Tea's Indian operations as a negative impact on dollar-denominated exports has been more than offset by the company paying less for procuring tea from commodity markets," Siganporia told reporters during the launch of an advertising campaign for the Tata Tea brand in Mumbai.
"Adequate risk management steps in our overseas business, which has dollar and pound exposure, have succeeded in neutralizing the rupee impact," he added.
The Indian rupee has gained around 10% against the dollar so far this year.
In the first quarter ended June 30, the company had recorded a combined currency loss of about INR350 million from operations at its Tetley unit in the U.K. and its Eight O Clock Coffee unit in the U.S.
Siganporia expects pressure from interest costs on funds borrowed for acquisitions to continue for one more quarter.
"On an operating level there is no margin pressure. However, acquisition financing has added to quarter-on-quarter costs for the last three quarters," he said, adding, "This may wind up in the next quarter."
The company had bought a 30% stake in U.S. company Energy Brands Inc. for $677 million in August last year, which it then sold to Coca Cola Co. (KO) for about $1 billion in May this year. The company expects to make a profit of about $415 million on the deal, which it will use to repay its loans.
Siganporia declined to comment on the company's current acquisition plans.
Shares closed 2.2% up at INR820.05 on the Bombay Stock Exchange, ahead of the benchmark 30-share Sensex which closed 0.2% higher at 17328.62.