Experienced Management: Company is managed by seasoned professionals. Mr. Ajit Thomas, Executive Chairman of the company has about three decades of experience in business and management with AVT Group of Companies.
Strong Brand Presence: AVTCL leads the branded tea market in Kerala with a 45-50% share and ranks second in Tamil Nadu with 25%, just behind Hindustan Unilever Ltd. It maintains a strong market position despite tough competition.
Lower Revenue Growth: Despite having a strong brand presence, company’s 5 years revenue growth has been 5.0% which is lower than industry average of 10.1%.
Investment Thesis: The stock is currently trading at an EV/EBITDA ratio of 13.4x with a price of ₹ 20,900 per share, suggesting an undervalued company compared to the industry peers. Based upon the strong fundamentals, market dominance, and diversified product portfolio, indicates a price of ~ ₹ 32,000 per share, which indicates a potential of > 50%
The company holds a strong position in the Southern tea market and sees potential for expansion into other regions of India. It is also diversifying into consumer products, natural food ingredients, nutraceuticals, and leather products.
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Min. Investment: ₹