💰 Financial Performance

Revenue Growth by Segment

Standalone Net Sales for H1 FY26 reached INR 126.98 Cr, representing a decrease of 11.65% compared to INR 143.73 Cr in H1 FY25. Segment assets as of September 30, 2025, are distributed as: Tea at INR 54.97 Cr, Electrical-Chennai at INR 34.08 Cr, Engineering at INR 44.00 Cr, and Electrical-Kolkata showing a negative asset base of INR 0.71 Cr.

Profitability Margins

Consolidated Net Profit for H1 FY26 was INR 20.12 Cr, a significant turnaround from a loss of INR 2.84 Cr in H1 FY25. For FY25, the Net Profit Margin was -8.19%, an improvement from -18.20% in FY24. Q1 FY26 reported a high Net Profit Margin of 42.18%, largely driven by 'Other Income' totaling INR 70.71 Cr in H1 FY26 compared to INR 16.64 Cr in H1 FY25.

EBITDA Margin

The Operating Profit Margin for FY25 was -2.11%, improving from -18.40% in FY24 due to a reduction in net losses. The Interest Coverage Ratio improved to -0.30 in FY25 from -3.67 in FY24, attributed to better EBITDA performance.

Capital Expenditure

Consolidated capital expenditure for H1 FY26 included INR 4.76 Cr for the purchase of Property, Plant, and Equipment (PPE) and intangible assets, compared to INR 12.51 Cr in the previous full year.

Credit Rating & Borrowing

The company maintains a high Debt-Equity Ratio of 4.08 as of March 31, 2025, increasing from 3.00 in the previous year due to a decrease in other equity. Interest expenses for H1 FY26 were INR 14.29 Cr.

⚙️ Operational Drivers

Raw Materials

Cost of Materials Consumed for H1 FY26 was INR 61.48 Cr, representing 48.4% of standalone net sales. Specific material names like steel or copper are not explicitly listed but are inherent to the Electrical and Engineering segments.

Raw Material Costs

Raw material costs stood at INR 61.48 Cr for H1 FY26, which is a 46.4% increase from INR 41.98 Cr in H1 FY25, indicating rising input pressure despite lower sales volume.

Logistics & Distribution

Other expenses, which include distribution and administrative costs, were INR 29.99 Cr for H1 FY26, representing 23.6% of standalone net sales.

📈 Strategic Growth

Growth Strategy

Growth is being pursued through the stabilization of the Tea and Engineering segments and leveraging the associate company, Veedol Corporation Limited, which contributed a share of profit of INR 6.29 Cr in H1 FY26. The company is also focusing on reducing net losses to improve Return on Net Worth.

Products & Services

The company sells bulk tea, electrical equipment including transformers and switchgears, and industrial engineering products such as fans and tea machinery.

Brand Portfolio

Andrew Yule, Veedol (via associate Veedol Corporation Limited).

Strategic Alliances

The company holds a significant stake in Veedol Corporation Limited (Associate), which provides a steady share of profits (INR 6.29 Cr in H1 FY26).

🌍 External Factors

Industry Trends

The industry is shifting toward mandatory digital audit trails and integrated financial reporting. The company is currently lagging in this transition, relying on manual intervention for consolidation, which increases audit risk.

Competitive Landscape

The company competes with private players in the tea industry and electrical equipment manufacturing; however, its CPSE status provides some regulatory and procurement advantages.

Competitive Moat

The company's moat is derived from its status as a Government of India enterprise and its diversified presence in Tea and Engineering, though high debt (4.08 ratio) and negative margins in some segments threaten sustainability.

Macro Economic Sensitivity

As a Central Public Sector Enterprise (CPSE), the company is sensitive to government infrastructure spending and Ministry of Heavy Industries policies.

⚖️ Regulatory & Governance

Industry Regulations

The company must comply with SEBI (LODR) Regulations. It recently failed to comply with Regulations 17(1), 18(1), and 19(1)/(2) regarding board and committee compositions.

Taxation Policy Impact

Tax expense for H1 FY26 was INR 3.60 Cr on a standalone basis.

Legal Contingencies

BSE imposed a fine of INR 6,41,920 for non-compliance with board composition norms during Q2 FY26. The company has also requested a waiver from SEBI for penalties related to other non-compliances disclosed as contingent liabilities.

⚠️ Risk Analysis

Key Uncertainties

The primary uncertainty is the 'Emphasis of Matter' by auditors regarding the lack of an integrated accounting system and manual intervention in consolidation, which creates a higher level of audit risk.

Technology Obsolescence Risk

The company faces technology risks in its financial reporting systems, as it has not yet implemented a full 'Audit Trail' across its entire accounting framework as required by the Ministry of Corporate Affairs.

Credit & Counterparty Risk

Provision for doubtful debts was INR 0.60 Cr in H1 FY26, and provision for doubtful loans/advances was INR 0.07 Cr, indicating some credit risk in receivables.