McLeod Russel India Limited- Fundamental Research

McLeod Russel India Limited (MRIL) was originally incorporated as Eveready Company India Private Limited on 5th May 1998. MRIL is the world's largest tea plantation company, which produce over 70 million kilos of high quality tea from its 53 tea estates in Assam and West Bengal. As the largest Indian tea exporter the company maintains strong connections with buyers in the United Kingdom and Europe. The Company's tea is marketed under the registered Elephant trade mark. Apart from the tea, McLeod Russel has over the past five years been closely working with local towns and villages throughout North East India with the cultivation of Jatropha (Jatropha curcas) under Agricultural project, which is used to make D1 Oil - Bio Diesel. MRIL has the certification for various credentials to its products from Fairtrade Labelling Organisation International (FLO), Hazard Analysis Critical Control Point (HACCP), Suppliers Ethical Data Exchange (SEDEX) and Ethical Tea Partnership (ETP).

Key Highlights:

• McLeod Russel India Limited  (McLeod Russel) is a member  of the Williamson Magor Group engaged in the business of tea production for over 140 years.
• Last Year  the Company achieved 11.37% higher production at 871 lakh kgs as compared to the previous year. The revenue from Operations was also 7% higher at Rs. 147506 lakhs. The post tax profit however was 7.8% down as compared to the previous year, primarily on account of lower sales realization per kg of tea sold, increase in cost of materials consumed, higher employee costs and higher costs of power and fuel.
• The Company has forty seven ISO 22000 certified factories. Company also has four estates certified as "Fairtrade" and thirty five estates certified as "Rainforest Alliance." The Nilpur Blending Unit is a HACCP Certified unit. Company also participates in Ethical Tea Partnership, a global initiative.
• The Company saw a total export quantum of 236 lakh kgs during the year with an overall export turnover of over Rs. 46525 lakhs. The Company presells nearly 70 per cent of its export volumes and 40 per cent of its domestic sales, securing realisations.
• Recently Phu Ben Tea Company, a step down subsidiary of the Company in Vietnam has signed an Agreement with Ngoc Hai Company for acquisition of a factory in Doan Hung District, Phu Tho Province, Vietnam with annual production capacity of 12 Lakh kgs.

 Recommendation Price                                          Price                                            Target Price
Accumulate(285-300)                                               Rs. 308                                           Rs. 370

                                  

Stock Details
Market Cap. (Cr.)	3407.49
Face Value	5.00
Equity (Cr.)	54.73
52 Wk high/low	330.00 / 246.90
BSE Code	532654
NSE Code	MCLEODRUSS
Book Value (Rs)	124.01
Industry	Tea

Subsidiary Companies

The Company has one wholly owned subsidiary namely, Borelli Tea Holdings Limited, U.K. (Borelli) and six step down subsidiaries. Borelli is inter alia engaged in the business of investing funds in various Companies engaged in tea production, blending marketing and investment activities.