Bullish on tea stocks on the long term: Pankaj Pandey

Pankaj Pandey, Head Of Research, ICICI Direct in an interview with ET Now talks about tea stocks.

Your opinion on some of the soft commodities and do you have a call on how you possibly would be looking at some of these tea or coffee counters going forward?

On the tea side we are definitely looking at better prices going forward in the Kenyan auction prices and that is why we had a recommendation last week in Jay Shree Tea with a target price of 190 but from a longer term perspective also we like this particular segment primary because of the fact that the input prices have capped and globally we would expect the prices to eventually move up.

We have seen little improvement in terms of the overall tea prices going forward and going forward we would expect that the cost of production would remain more or less intact as the output prices will definitely improve going forward which will definitely add to the bottom line for both of these companies. We have a coverage on Mcleod Russel and Jay Shree Tea and our preference would be Jay Shree Tea in the tea space.