Tea and coffee is something that is used by most of the Indians to start their day with, making it a common habit resulting in a huge and stable market for the tea and coffee companies in India. The continuous demand gives a strong sale every year to these companies.
India is a tea drinking nation and here tea is consumed almost 15 times more than coffee. This deep-rooted habit provides solid support for basic tea stocks in India.
Investors can look for two important factors to grow in this sector, first by the large-scale consumption in the country itself and secondly by the high global trade. India plays a vital role as it is the 3rd largest tea exporter worldwide and the 7th largest coffee producer in the world. These factors help us in domestic as well as the international sales, making both coffee stocks India and tea stocks important.
Tea and Coffee Market Trends
There is stability in the Indian Tea market and it is a huge market with a potential to grow its revenue to about US $2.8 Billion by 2030 which is steadily growing at 4.8% per year. The traditional black tea is still among the most popular types of tea.
Although the Indian Coffee market is rising rapidly and is estimated to reach over US $2.8 billion by 2030 with a growth rate of about 7.8% per year. This jump is witnessed because the purchasing capacity is increasing and people are shifting towards the cities. The rapid growth in coffee compared to tea gives us a picture about the future profits that will be coming from premium coffee and other high value products.
Best Tea and Coffee Stocks for 2025
1. Tata Consumer Products Ltd. (Tata Consumer)
Tata Consumer Products Ltd. is one of the undisputed leaders in the sector which has a huge market capitalization of over Rs.1,13,698 Cr. This company owns big household brands like TATA Tea for the domestic market and Tetley for the world. There is a high diversification in this business with packaged foods and beverages giving it an extra edge and saving it from the direct impact of swinging tea and coffee commodity prices.
The company is strategically consolidating its position, having merged/demerged its Tata Coffee operations into the main Tata Consumer structure. This makes the overall business clearer and reinforces its standing as an integrated food and beverage powerhouse.
2. CCL Products (India) Ltd.
CCL Products is one of the unique players in the market that is known as the world’s largest private label manufacturer of instant coffee. It has a B2B business model with almost 90% of its revenue coming from bulk exports of Instant coffee to multiple global brands and clients that require private labels. The main strength of the company is its global scale and cost efficient manufacturing. It cleverly avoids many local commodity price risks by purchasing raw materials globally and exporting finished, value-added products, which gives operational resilience and stable margins to the company.
3. Vintage Coffee & Beverages Ltd. (VCBL)
VCBL was incorporated in the year 1980, it specializes in manufacturing and exporting instant coffee and chicory. The products of this company are sold under its own ‘Vintage’ brand which also offers private labeling services. This company has a strong focus on the technology, such as using advanced double aroma recovery systems, and also provides customized packaging solutions to the global customers. The company has a market capitalization of over Rs.2,377 Cr and shows healthy return ratios, such as an ROE of 17.0%.
4. Tata Coffee Ltd.
Although TATA coffee was earlier a separate business entity, it is no longer independently listed. The plantation business of TATA coffee is demerged into a subsidiary of TATA consumer, and the rest of the business under this company are merged into TATA Consumer Products Ltd. Investors who were having shares of TATA Coffee have received a ratio of shares of TATA Consumer Products Ltd. as part of this demerger arrangement.
5. Bombay Burmah Trading Corporation Ltd. (BBTCL)
With its historic presence in the coffee and tea sector BBTCL is one of the oldest listed companies in India. The company is primarily viewed as a holding company as it has a good amount of stake in Britannia Industries. Though the company has a good exposure to plantations as well, the stock price performance is mainly connected to the results and valuation of Britannia.
6. Goodricke Group Ltd.
Goodricke Group Ltd. company is a major tea planter with its tea gardens located in Darjeeling, Assam, and Dooars. The company mainly deals in bulk teas and instant teas. The land bank of the company has also been increased as it has acquired certain estates from McLeod Russel, by taking the advantage of distress in the organized tea sector. Majority of the revenue generation of the company is done from the domestic markets.
7. Jay Shree Tea & Industries Ltd.
Jay Shree Tea & Industries Ltd. company is part of B.K.Birla group and is amongst the largest producer and exporter of tea with its estates situated in Indian regions and East Africa. It not only focuses on tea but also offers diversification through products of non tea segments like sugar and chemicals. The company is highlighted for its high-quality speciality teas, including Darjeeling First Flush Oolong Tea. Majority of the company’s revenue is generated from India only.
8. McLeod Russel India Ltd. (MRIL)
McLeod Russel was once a major leader in the tea plantation sector. However, the company has faced severe financial and operational difficulties in recent years. Its ongoing struggles demonstrate the high volatility and inherent risks associated with the heavily indebted bulk plantation business model.
9. Rossell India Ltd.
Rossell India Ltd. company is not only based in the tea sector but also has its presence outside of its core agricultural business. The company is present in the aerospace and defense sector as well. The main focus of the company is to grow, manufacture and sell high-quality tea in the national and international market.
10. Dhunseri Tea & Industries Ltd. (DTIL)
DTIL is a smaller listed plantation company whose profitability is very exposed to the financial stress currently affecting the organized bulk tea sector. The company’s stock performance has seen significant negative returns over the short and long term.
| Company Name | Market Cap | Stock Price | 52 Week High | 52 Week Low |
|---|---|---|---|---|
| Tata Consumer Products Ltd. | Rs.1,13,767 Cr. | Rs.1,162 | 1,202 | 883 |
| CCL Products (India) Ltd. | Rs.12,412 Cr. | Rs.929 | 1,074 | 525 |
| Vintage Coffee & Bev. Ltd. | Rs.2,377 Cr. | Rs.164 | 174 | 147 |
| Jay Shree Tea & Ind. Ltd. | Rs.240 Cr. | Rs.83 | 151 | 82 |
| Goodricke Group Ltd. | Rs.358 | Rs.166 | 295 | 162 |
| McLeod Russel India Ltd. | RS.458 | Rs.44 | 68 | 28 |
| Dhunseri Tea & Ind. Ltd. | Rs.170 Cr. | Rs.162 | 314 | 146 |
| Rossell India Ltd. | Rs.204 | Rs.54 | 97 | 53 |
| Bombay Burmah Trading Corp. | Rs.12,663 | Rs.1,815 | 2,488 | 1,607 |
Read Also: Top 10 Consumer Staples Stocks in India
Key Factors to Consider for Tea and Coffee Stocks
1. Revenue Mix
While analysing these companies investors shall look for companies sales and where is it coming from. Branded players like TATA Consumers have the pricing power as they sell packaged goods under established brands. These companies often dictate the prices, ensure stable revenue and pass the rising raw material costs onto consumers. This provides a stable revenue and profit. However, Tea and Coffee producing companies are “price takers” as their main focus is on selling raw commodities via auctions and profits depend upon the highly volatile auction prices. The companies with high bulk exposure have more erratic and unpredictable earnings, making them a little riskier option.
2. Financial Health and Margin Check
Margin Stability is the main factor as investors shall look at the trend of EBITDA margin (operating profit measure) and Return on Equity (ROE). Companies showing a continuous high ROE tells us that the management is efficient in getting profits from the shareholders capital.
Debt Levels and Working Capital shall be considered for plantation firms, as farms have a seasonal cycle here production has a graphical pattern as these companies require more capital due to bridging the gap between putting money on plantation and getting money from final sales. High debt is considered as a warning whereas companies that maintain their Debt-to-Equity ratio under 0.5 are generally considered safer.
3. Quality of Leadership and Management
Corporate governance of the companies is extremely important especially for smaller firms. In small promoter driven plantation companies there is generally a risk concentrated shareholding and potentially complex crossholdings. As an investor you should look for factors like clear financial reporting, professional management and a transparent shareholding pattern.
4. Valuation Metrics
This metric helps in determining if the stock price is low or high compared to other stocks in its segment. P/E ratio mainly used and companies like TATA generally trade at high P/E ratio which reflects that the market is ready to pay a premium for the company’s stability, predictable growth, and powerful brand leadership.
For Plantation stocks, the valuation is more complex as these bulk creators have volatile earnings meaning the P/E ratio might fluctuate widely or may even come down to zero during a bad yield year. A very low P/E of a stock does not mean it is cheap, rather it is a signal that the company has high risk or has poor quality of earnings.
5. Climate Risk (ESG Focus)
This is the biggest unpredictable issue of the farming businesses. Tea cultivation heavily relies on static temperature and consistent rainfall. In the past few years weather has shown an unusual pattern, like severe frosts followed by sudden temperature spikes, and then massive rainfall, which causes significant crop losses. This risk shows that Environmental (E) factors and Social (S) factors (like labour) are central financial risks for plantation stocks.
Key Financials of Tea and Coffee Stocks
Financial Comparison of Key Tea and Coffee Stocks (Approximate Metrics)
| Company Name | P/E Ratio | ROE (%) | ROCE (%) | Dividend Yield (%) |
|---|---|---|---|---|
| Tata Consumer Products Ltd. | 76.72 | 6.39 | 7.92 | 0.71 |
| CCL Products (India) Ltd. | 37.5 | 17 | 13.1 | 0.53 |
| Vintage Coffee & Bev. Ltd. | 40.7 | 17 | 15.4 | 0.06 |
| Jay Shree Tea & Ind. Ltd. | 12.0 | 9.73 | 3.74 | 0.58 |
| Goodricke Group Ltd. | 0.0 | 2.86 | 3.22 | 0.00 |
| McLeod Russel India Ltd. | -1.78 | 0.00 | -13.62 | 0.00 |
| Dhunseri Tea & Ind. Ltd. | 0.00 | -9.21 | -44.5 | 0.62 |
| Rossell India Ltd. | 10.8 | 10.8 | 10.5 | 0.72 |
| Bombay Burmah Trading Corp. | 11.6 | 21.9 | 35.5 | 0.92 |
Check Out: List of Tea & Coffee Sector Stocks
Risks to Consider
- Climate Vulnerability: Climate is a major player which is a very unpredictable risk for the plantation company. As both tea and coffee’s growth is majorly dependent on the stable weather patterns.
- Commodity Price Swings and FX: The prices of tea and coffee are decided globally and if there is a global surplus in the production of these commodities then prices are directly hampered.
- Foreign Exchange (FX) Risk: In the foreign exchange market if the Indian rupee suddenly gets stronger in comparison with the global currencies like US Dollar or Euro the portion of profits shrinks. Due to this the Indian exporters have a risk to the changing forex rates.
- Labour Cost Pressure: Labour wages are a fixed cost that tends to rise with time. Also the Indian Tea Association has seen a sharp decline in the profits due to increasing labour cost.
- Concentrated Revenue: Most of the tea companies heavily rely on one or two specific regions like assam or darjeeling or any single type of tea, making them highly susceptible to risk if these areas face hardship due to weather, production issue or if demand falls.
Pocketful is a one stop solution to invest in stocks, ETFs, and other assets. So as an investor you can do your research, identify potential tea stocks or coffee stocks and use the pocketful platform to invest for your future trades.
Read Also: List of Best Monopoly Stocks in India
Conclusion
Investing in tea and coffee stocks is a compelling investment area which is directly dependent upon domestic consumption and increasing global export opportunities.
Although this sector requires a careful analysis and before investing you should understand the difference between brand-led companies and plantation based companies.
Frequently Asked Questions (FAQs)
What is the main difference between FMCG and Plantation Stocks?
FMCG stocks mainly depend upon branding, marketing, and distribution of their products to earn a stable margin. On the other hand plantation stocks depend upon crop yield and the international price fluctuations which gives highly volatile earnings.
Why is specialty coffee a key trend to watch?
Specialised coffee’s growth is rising rapidly with 13.6% CAGR in India. The growth is driven by a new and young consumer base and a demand for premium, high value products that gives a good profit to those companies that focus on high quality production.
How can climate affect the product yield?
Sudden changes in the weather like droughts, hailstorms, and frosts directly affects the crop yield of both tea and coffee which has a direct effect on bulk production.
How are margins lowering for bulk tea producers?
They are shrinking because of fixed costs of labour and the stagnant or declining prices due to increased production and surplus supply.
Is Tata Coffee still listed on the stock exchange?
Right now the company is having a merger with TATA Consumer Products, that is leading to its effective removal from the index and consolidation under the larger entity.
