A V Thomas & Co. Limited Unlisted Shares

Are you looking to invest in a well-established, diversified company with a legacy spanning nearly nine decades? A V Thomas & Co. Ltd (AVT) , incorporated in 1935, is a multi-faceted Indian company with a strong presence in consumer products, trading, logistics, and exports. The company’s flagship brand, “AVT Premium” , is the second largest selling dust tea brand in India and the third biggest brand in the economy segment overall, making AVT the fourth largest player in terms of tea sales on an all-India basis.

With business operations spanning Kerala, Tamil Nadu, Andhra Pradesh, Karnataka, and Orissa, and exports to the Middle East, AVT offers a unique opportunity to invest in a stable, dividend-paying company with a strong brand portfolio and diversified revenue streams.

1. Company Overview: A Legacy of Trust Since 1935

• Incorporated: 1935.

• Headquarters: Kerala, with operations across South India.

• Core Business: Trading, Manufacturing, and Exports.

• Certification: ISO 22000:2005 certified for its tea and coffee packing units at Coimbatore.

• Subsidiaries:

  • AVT Gavia Foods Private Limited

  • A V Thomas Investments Company Limited

2. Business Divisions: A Diversified Portfolio

AVT’s strength lies in its diversified business model, spanning multiple sectors.

A) Consumer Products Division (Flagship Business)

This is the core of AVT’s business and includes:

• Packet Tea & Coffee: Sale of tea and coffee in packet, bulk, or value-added forms.

• Premixes: Tea and coffee premixes.

• Market Leadership:

  • “AVT Premium” is the 2nd largest selling Dust tea brand in India.

  • It is the 3rd biggest brand in the economy segment.

  • AVT is the 4th largest player in terms of tea sales on an all-India basis.

  • Market Leader in Kerala with an impressive market share in Tamil Nadu.

  • Also has a steady presence in Andhra Pradesh, Karnataka, and Orissa.

• Exports: Exports tea to Middle East countries , with a positive response.

B) Trading Division

• Products: Trading of Cardamom, GI & GC sheets, roofing materials, aluminum & related accessories, vending machines, and dairy products.

• Performance: Sales turnover has been driven by volume growth in the sale of GI & GC sheets.

C) Roofing Division

• Products: Manufacturing of roofing materials, GI & GC sheets.

• Facilities: A pipe profiling factory at Perundurai, Tamil Nadu commenced commercial production in 2019-20.

D) Logistics Division

• Services: Comprises logistics and other C&F (Carrying & Forwarding) related activities. This division supports the supply chain for AVT’s products and third-party clients.

E) Dairy Division

• Products: Dairy products, including milk and milk shakes.

• Growth: The division has shown significant volume and value growth in recent years and is on the path to profitability.

3. Financial & Operational Performance (2018-2022)

FY 2018-19 Performance

• Consumer Products: Volume growth of 10% despite difficult market conditions. Continued market leadership in Kerala. Exports to Middle East started positively.

• Trading: Sales turnover higher, driven by 16% volume growth in GI & GC sheets.

• Roofing: Pipe Profiling Factory at Perundurai expected to commence production in Q1 FY20.

• Logistics: Volume affected due to market conditions.

• Dairy: Good volume growth; new Milk Shake products introduced.

• Cardamom Exports: Seriously affected due to restrictions in Saudi Arabia.

FY 2019-20 Performance

• Consumer Products: Volume growth of 4% . Market leadership sustained in Kerala. Exports steady. Cardamom exports remained NIL due to Saudi quality restrictions.

• Roofing: Volume dropped ~30% due to a downturn in the construction industry. Pipe production at Perundurai started in Q2 and performed satisfactorily.

• Logistics: Volume affected by poor market conditions.

• Dairy: Significant volume and value growth; expected to become profitable next year.

FY 2021-22 Performance (Pandemic Impact)

• Consumer Products: Overall volume drop of 4% due to the pandemic. However, AVT remained the market leader in Kerala with a good share in Tamil Nadu. Exports and other states were fairly steady.

• Roofing: Overall volume drop of ~6% , with a major impact in Q1 due to the pandemic.

• Logistics: Volume affected by poor market conditions.

• Dairy: Overall sale was affected by the pandemic.

4. Key Investment Highlights

1. Nine-Decade Legacy: Established in 1935, AVT has a long and trusted history in Indian business.

2. Strong Brand Recognition: Flagship brand “AVT Premium” is a top-3 tea brand in India, with the company being the 4th largest tea player overall.

3. Market Leadership: Dominant market leader in Kerala with a strong presence in Tamil Nadu and other South Indian states.

4. Diversified Business Model: Presence across Consumer Products (FMCG), Trading, Roofing, Logistics, and Dairy reduces dependence on any single sector.

5. Export Potential: Successfully exporting tea to the Middle East, with potential for further expansion.

6. ISO Certified: ISO 22000:2005 certification for its tea and coffee packing units ensures quality standards.

7. Resilience: Has maintained market leadership and steady performance despite challenges like the pandemic and industry downturns.

8. Growth in Dairy: The dairy division has shown strong growth and is on the path to profitability, adding a new growth vector.

Risks to Consider

1. Geographical Concentration: Business is heavily concentrated in South India, making it vulnerable to regional economic downturns.

2. Impact of Commodity Prices: Profitability in tea and coffee is sensitive to fluctuations in raw material prices.

3. Regulatory Risk in Exports: Exports, especially cardamom, are subject to import restrictions and quality standards in destination countries (e.g., Saudi Arabia).

4. Cyclical Industries: The roofing division is tied to the construction industry, which is cyclical.

5. Intense Competition: Faces intense competition from large national and multinational FMCG players in the tea and coffee segments.

6. Unlisted Liquidity: As an unlisted company, shares are not traded on stock exchanges, and liquidity may be limited.

Valuation & Unlisted Share Price

(Note: The source text did not provide a specific current valuation or share price. Investors should check the Unlisted Network platform for the latest traded price.)

• Outstanding Shares: Information not provided.

• Share Price: Please check the Unlisted Network Android or iOS mobile app for the latest traded price and historical data.

The Opportunity: Own a Stake in a Legacy South Indian FMCG Leader

A V Thomas & Co. Ltd offers a unique opportunity to invest in a company with a nearly 90-year legacy, strong brand recognition, and a diversified business model. As a market leader in its core tea business and with growing divisions in dairy and roofing, AVT provides a blend of stability and growth. For investors seeking exposure to a well-managed, dividend-paying company with a strong foothold in South Indian consumer markets, AVT is a compelling addition to a diversified portfolio.

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Invest in a legacy of trust and quality since 1935.