DTIL - Dhunseri Tea

📊 NSE: DTIL 🏢 Tea 📅 Last Updated: 12/13/2025 21:31

💰 Financial Performance

Revenue Growth by Segment

Consolidated Total Operating Income (TOI) grew by 15% YoY to INR 456.38 Cr in FY25, following a 17% YoY growth in FY24 (INR 395.42 Cr). Standalone tea sales volume grew by 52% in FY24, though realizations dropped by over 10%.

Geographic Revenue Split

Operations are split between India (Assam) and Africa (Malawi). Domestic tea production reached 3.46 million kg in Q1FY26, while overseas tea production in Malawi grew to 9.16 million kg in CY24, up 24.6% from 7.35 million kg in CY23.

Profitability Margins

The company reported a consolidated net loss of INR 141.09 Cr in FY24. Operating profitability remained subdued in FY25 due to production losses from pest attacks and climate challenges, despite higher tea realizations.

EBITDA Margin

PBILDT margins are currently under pressure; a sustained improvement beyond 12% is a key monitorable for positive credit action. FY24 saw operational losses due to a 10% drop in realizations and increased wage costs.

Capital Expenditure

No significant capital expenditure is planned for the medium term. The company has focused on liquidity through asset monetization, including the sale of Dilli Tea Estate for INR 35 Cr and Jaipur Factory for INR 20 Cr in H1FY25.

Credit Rating & Borrowing

Long-term bank facilities (INR 148.93 Cr) are rated CARE A; Stable as of October 2025. Short-term facilities (INR 0.50 Cr) are rated CARE A2+. Interest coverage stood at 3.75x in H1FY25, though it is expected to moderate by year-end.

⚙️ Operational Drivers

Raw Materials

Green tea leaves (including bought-out leaf) and manual labor, with wage costs accounting for 45-50% of the total cost of sales.

Import Sources

Sourced locally from tea gardens in Assam, India, and plantations in Malawi, Africa.

Key Suppliers

Not specifically named; procurement involves internal garden production and third-party 'bought-out' leaf suppliers in the tea-growing regions.

Capacity Expansion

Currently operates 11 tea estates and 11 tea factories (reduced from 12 following asset sales). Focus has shifted from expansion to restructuring by disposing of loss-making assets like the Hatibari and Shivani factories (INR 15 Cr).

Raw Material Costs

Wage costs are the primary driver, representing 45-50% of sales. Steep upward revisions in statutory wages in Assam directly impact margins by increasing the cost of production per kg.

Manufacturing Efficiency

Average recovery rate ranges from 22.55% to 23.76%, which is in line with the industry average of ~22%. Yield improved to 2011 kg per hectare in Q1FY26 compared to 1100 kg per hectare in H1FY25.

Logistics & Distribution

Tea is distributed via auctions, private sales through intermediaries, and direct packaged tea sales.

📈 Strategic Growth

Expected Growth Rate

15-17%

Growth Strategy

Growth is driven by the acquisition of new tea gardens and improving the yield of existing ones. The company is also optimizing its portfolio by divesting underperforming assets (INR 70 Cr+ in total sales) and focusing on higher-quality tea production to improve realizations.

Products & Services

Bulk black tea, packaged tea, and macadamia nuts.

Brand Portfolio

Dhunseri Tea.

New Products/Services

Increased focus on 'better quality' tea production in newly acquired gardens to command higher auction premiums.

Market Expansion

Consolidation under Naga Dhunseri Group Limited (NDGL), which now holds a 54.56% stake, providing stronger financial backing for market stability.

Market Share & Ranking

Not disclosed, but recognized as an established player with over five decades of track record in the tea industry.

Strategic Alliances

Part of the CK Dhanuka Group, providing financial flexibility and access to a group liquidity pool of ~INR 1,200 Cr.

🌍 External Factors

Industry Trends

The tea industry is evolving toward quality-centric production to counter rising labor costs (45-50% of total costs). The industry remains highly fragmented and susceptible to climate change.

Competitive Landscape

Competes with other bulk tea producers in Assam and international tea/macadamia producers in Africa.

Competitive Moat

Durable advantage stems from the promoter's 50-year track record and the financial flexibility of being part of the Dhunseri Group, which holds ~INR 1,200 Cr in liquid assets.

Macro Economic Sensitivity

Highly sensitive to currency fluctuations in Malawi and global tea/macadamia price volatility.

Consumer Behavior

Shift toward packaged and branded tea, which DTIL is addressing through its blending and packaging unit in Rajasthan.

Geopolitical Risks

Operations in Malawi, Africa, expose the company to regional economic instability and currency risks.

⚖️ Regulatory & Governance

Industry Regulations

Subject to statutory wage revisions in the tea sector (Assam) and agricultural export/import regulations in Malawi.

Environmental Compliance

Not disclosed in absolute INR values, but tea operations are subject to agro-climatic and environmental regulations.

Taxation Policy Impact

Not disclosed.

⚠️ Risk Analysis

Key Uncertainties

Agro-climatic risks (hailstorms/pests) and volatility in macadamia prices are the primary uncertainties, with potential to cause multi-crore operational losses.