The Company
Dhunseri Tea & Industries Ltd. (DTIL) is 5 decades old Dhunseri Group Company. Over the last five decades, the Company has been a progressive,
quality-focused Indian tea producer. The tea company has won the trust
of its traders and consumers, in regard to the superior quality of tea
it supplies.
Over the years DTIL has
expanded its reach from eight estates in 2003-04 to ten estates in
2012-13 in Assam. This makes the Company one of the ten largest tea
producers in India. The Company’s tea packaging and blending units are
located in Dhunseri Tea Estate (Assam) and at Jaipur (Rajasthan). The
Company as of now produces approximately 1% of the overall tea produced
in India. The Company holds the highest market share in the premium
segment of packet tea in Rajasthan.The Company is also revamping these
facilities so as to double the total tea sales.
The tea produced by the Company is of superior quality Assam CTC and
Orthodox teas (marketed in India through auctions and sold in packets)
under LAL GHORA and KALA GHORA brands for more than 25 years. The
Company has also launched another brand in the premium segment namely,
BAHIPOOKRI in Rajasthan which is in 1 kg packets. The Company intends to
launch a new brand-CHHOTE LAL- to cater to the lower segment of
Rajasthan.
Subsidiaries
During 2012-13, the Dhunseri Group acquired two companies in Malawi owning
two tea estates for a consolidated $ 22 million through its subsidiary
in Singapore namely, Dhunseri Petrochem & Tea Pte Ltd.; this marked
the extension of a five-decade Indian tea company to international
plantations. The two companies acquired were Makandi Tea & Coffee
Estates Limited and Kawalazi Estate Company Limited. With this
acquisition, Dhunseri Petrochem &Tea Ltd. has joined club of tea
companies who have already made their foray in the overseas tea
plantation business.
With this Dhunseri group’s Tea production capacity has reached to 22 million kgs per annum.
The aforesaid two subsidiaries based in Malawi, Africa in totality produce 94.50 lakh kgs of tea and 3.2 lakh kgs of Macadamia.
The Malawi gardens produce tea of a middling quality by tea bag
manufacturers, which is a fast growing segment of the global tea
segment. Besides, the Malawi acquisition has widened the Company’s
offerings across the premium and middling segments, created a consistent
international presence with a widening geographic footprint.
De-merger
Demerger from Dhunseri
Petrochem Limited (formerly known as Dhunseri Petrochem & Tea
Limited) and Dhunseri Tea & Industries Limited (formerly known as
Dhunseri Services Limited). DTIL is recently listed on BSE and NSE.
Key Points on Fundamental of DTIL
- Investor friendly company continuously paid dividend for last 13 years.
- Low equity base - 70,04,951 share of Rs 10 FV
- High EPS
- Company is having Very Low Debt
- Well established in retail business with addition of new products will give further boost in EPS.
- Major acquisition and expansion is already completed so no major CAPEX in near future.
- Currently trading at P/E less as compared to industry P/E 20.8
- Company's Book Value is under process of calculation after de-merger by Earnst and Young. The estimated BV is around 600 !!!
- The Macadamia seed production will be promising future business as world's demand of Macadamia has increased and there are very few players in Asia and Africa in this segment ( Link HERE )
Sum-up
The Tea Production has always been a lucrative business. Dhunseri, having strong fundamental and global presence in this sector has potential to become multibagger in couple of years. The CMP is 240/- and I will not be suprised if it will be trading in four digits.
The Tea Production has always been a lucrative business. Dhunseri, having strong fundamental and global presence in this sector has potential to become multibagger in couple of years. The CMP is 240/- and I will not be suprised if it will be trading in four digits.
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