Like wise i have the entire analysis done for last 3 years ( Weekly )
If these prices are not reduces any cost escalation can be absorbed for sure.
I just need your advise on this assumption. ( Chinwi your idea also very important )
Are these magical tea prices translating into the EPS? Remember it's not just wages that are increasing.
If you take Gaja's example AGAL has made a profit of 1.5 million in the March quarter. This is a quarter where you say tea prices are sky high.
According to Gaja's post the management expects additional costs from wages to be 200 million+ and the gratuity provision can be another 100 to 200 million+ (Balance sheet provision figure is 500 million currently).
So how will a company like AGAL absorb nearly 400 million in costs (actual+provisions) when they are only delivering 1.5 million in profits (that too in a quarter with high tea prices)?