Company Analysis

McLeod Russel India Ltd.
Company Basics BSE ID NSE ID GROUP EQUITY MKT.CAP 532654 MCLEOD A Rs. 54.73 Cr Rs 3910.Cr

CMP: Rs.361

Target: Rs.489

Exp ROI: 35%

Financial Basics FV EPS P/E P/BV BETA RONW Rs 5.00 Rs 20.01 17.85 3.30 0.7106 21.40

Share Holding Pattern Holder's Name Foreign Institutions Promoters Non Prom. Public & Others % Holding 34.31 5.32 45.41 5.02 9.65


The flagship tea company of the B M Khaitan group, 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 our 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. Declining Production against constant rising consumptions: Poor weather conditions led to a 1.7 per cent drop in tea production in India during the January-October period, according to latest figures released by the Tea Board of India. At 12.31 million kg, North India (West Bengal and Assam) saw the sharpest decline in production. South India recorded a 3.70 million kg drop in output. Overall production during the period stood at 902.27 million kg, against 918.28 million kg in the corresponding period last year. In 2011, India’s tea production stood at 988 million kg. The annual rise in tea consumption in India is about three per cent and the cumulative deficit at the beginning of the next season is estimated at about 150 million kg. The Tea Board figures factor in some of the bought leaf factories output; till recently, only the organized sector was accounted for. The industry feels if the bought leaf output is considered, growth in consumption could be higher. Management Guidance
Source: Business Standard • The management expects consolidated crop size of 102 million Kg in FY12. Margins to be also

higher owing to improvement in Vietnam and Uganda Operations. It is also looking for acquisition of tea gardens in South Africa • The company plans to decrease debt on its books aggressively this year. On a standalone basis, the company plans to become debt free company but for looking for acquisitions in South Africa. • Capex for FY12 stood at Rs 60 crore on consolidated basis and Rs 35-40 crore on Standalone basis Outlook & Conclusion: Currently, McLeod Russell Ltd. is trading at Rs.360. We Recommend “Buy” with a Target Price of Rs 489 based on forward P/E of 13.14 with an Expected Earnings per Share of Rs.27.40 in FY2014. Equity Research Manager: Nipun D Bhatt
4th Jan, 2013

The views expressed are those of the analyst and the Company may or may not subscribe to all the views expressed therein. in whole or in part. without prior written consent. directly or indirectly. or deal as principal or agent in or for the securities mentioned in this document. Website: www. legal. effect or have effected an own account transaction in. options and other derivatives as well as non investment grade securities . not its Each of these entities functions as a separate. accounting and tax advice or a representation that any investment or strategy is suitable or appropriate to your specific circumstances. Ltd. Prahladnagar Garden. to any other person or to the media or reproduced in any form. This information is subject to change without any prior notice. This document is being supplied to you solely for your information and may not be reproduced. agents or representatives shall be liable for any damages whether direct or indirect. The recipient should take this into account before interpreting the document. transmitted to. copied or distributed. completeness or fairness of the information and opinions contained in this document.Paras-II. express or implied. This may not be taken in substitution for the exercise of independent judgment by any recipient. incidental. The Disclosures of Interest Statement incorporated in this document is provided solely to enhance the transparency and should not be treated as endorsement of the views expressed in the report. for any purpose. financial positions and needs of specific recipient. based on their own investment objectives. This report and information herein is solely for informational purpose and may not be used or considered as an offer document or solicitation of offer to buy or sell or subscribe for securities or other financial instruments. Nr. who must make their own investment decisions. any company referred to in this report. its affiliates. This report has been prepared on the basis of information that is already available in publicly accessible media or developed through analysis of Wealth First Portfolio Manager Pvt. no representation or warranty. Accordingly.involve substantial risk and are not suitable for all investor` Wealth First Portfolio Manager Pvt. has not independently verified all the information given in this document. The Company reserves the right to make modifications and alternations to this statement as may be required from time to time without any prior approval. The securities discussed and opinions expressed in this report may not be suitable for all Disclaimer : The report and information contained herein is strictly confidential and meant solely for the selected recipient and may not be altered in any way. is made as to the accuracy. distinct and independent of each other. The securities described herein may or may not be eligible for sale in all jurisdictions or to certain category of investor` Persons in whose possession this document may come are required to inform themselves of and to observe such restriction. to any other person or published. Neither the Firm. employees. . Ltd. Nothing in this report constitutes investment. their directors and the employees may from time to time. . redistributed or passed on. Wealth First Portfolio Manager Pvt. The investment discussed or views expressed may not be suitable for all investor` Certain transactions -including those involving futures.wealth-firstonline. copied. and should consult its own advisors to determine the merits and risks of such an investment.Head Office "Capitol House" 10. Each recipient of this document should make such investigations as it deems necessary to arrive at an independent evaluation of an investment in the securities of companies referred to in this document (including the merits and risks involved). They may perform or seek to perform investment banking or other services for. in part or in whole. Ahmedabad-380015 Call: +91 079 40240000 Email: nipun@wealthfirst. or solicit investment banking or other business from. special or consequential including lost revenue or lost profits that may arise from or in connection with the use of the information. Ltd.