Gillanders Arbuthnot and Company Limited (**GACL**), a flagship of the **Kothari Group**, is a diversified multi-national conglomerate with a legacy spanning tea cultivation, textile manufacturing, engineering, and real estate. The company operates a complex tiered structure with a significant footprint in **India (West Bengal and Assam)** and international operations in **Mauritius** and **Malawi**. --- ### **Core Business Segments and Asset Base** GACL’s operations are categorized into four distinct business verticals, leveraging a mix of biological assets, industrial manufacturing, and service-oriented engineering. | Segment | Operational Scope | Key Assets & Capacity | |:---|:---|:---| | **Tea** | Cultivation, processing, and sale of tea. | **6 ISO 22000:2018 & Trustea certified factories**; extensive tea estates in India and Malawi. | | **Textile** | Manufacturing yarn from cotton and man-made fibers (Acrylic, Polyester, Viscose). | Specialized units in West Bengal focusing on synthetic and cotton value chains. | | **Engineering (MICCO)** | EPC (Turnkey) projects, steel structural fabrication, and piping. | New structural fabrication workshop (**300 MT/annum capacity**) operational as of **Sept 2025**. | | **Property** | Real estate management and leasing. | High-value office premises held as investment property in **Kolkata**. | --- ### **Global Footprint and Subsidiary Performance** The company manages its international interests through **Gillanders Holdings (Mauritius) Limited**, which serves as the holding vehicle for African operations. * **Naming'omba Tea Estates Limited (NTEL), Malawi:** A critical step-down subsidiary engaged in the production of **Tea**, **Macadamia Nuts**, and **Timber**. * **Production (FY25):** Tea (**0.18 crore Kgs**) and Macadamia Nuts (**0.22 crore Kgs**). * **Financial Recovery:** NTEL achieved a significant turnaround in **FY25**, reporting an **EBITDA of ₹13.78 crore**, rebounding from a loss of **₹23.15 crore** in **FY24**. * **Capital Infusions:** GACL continues to support its Mauritius subsidiary to meet capital requirements, with recent investments of **USD 800,000** (Aug 2025) and **USD 50,000** (Nov 2025). --- ### **Agricultural Methodology and R&D Innovation** GACL emphasizes sustainable and high-yield agricultural practices for its biological assets (unharvested green leaves and macadamia nuts). * **Soil & Process Optimization:** The company utilizes **Vermi compost** and **Indigenous Technical Knowledge (ITK)** to enhance soil organic status. Process modifications include the installation of **Gas Burners** to improve energy efficiency and product quality. * **Research & Development:** With an annual revenue expenditure of approximately **₹22.19 lakhs**, R&D is focused on process modification, cost reduction, and import substitution. Notably, **no technology has been imported** in the last three years, reflecting a reliance on in-house innovation. * **Valuation:** Biological assets are measured at **fair value less costs to sell** at the point of harvest. --- ### **Strategic Growth and Operational Pivot** The Group is currently executing a strategy focused on quality over volume and increased mechanization. * **Tea Division Strategy:** Shifting toward **"quality and clean tea"** to command higher auction premiums. To mitigate labor challenges and rising costs, the division is aggressively increasing **mechanization** and exploring **new export markets**. * **Engineering (MICCO) Expansion:** The division is a preferred partner for major steel players, including **Tata Steel, JSW, SAIL, and ArcelorMittal Nippon Steel**. It secured new orders worth **₹204 crore** in **FY24** and is expanding its fabrication capabilities. * **Textile Value-Add:** To counter the "major crisis" in the synthetic value chain caused by global demand slumps, the division is pivoting toward **value-added products** to protect margins. --- ### **Financial Performance and Capital Structure** GACL demonstrated a robust financial turnaround in **FY 2024-25**, returning to profitability after a difficult **FY 2023-24**. **Standalone Financial Summary:** | Metric (₹ in Crore) | FY 2024-25 | FY 2023-24 | FY 2022-23 | | :--- | :--- | :--- | :--- | | **Income from Operations** | **412.75** | **330.43** | **421.60** | | **EBITDA** | **22.68** | **3.37** | **33.28** | | **Profit / (Loss) After Tax** | **26.72** | **(48.62)** | **(1.53)** | | **Basic & Diluted EPS (₹)** | **12.52** | **(22.78)** | **(0.72)** | **Key Financial Notes:** * **Exceptional Gains:** Profitability in **FY25** was aided by a **₹12.04 crore** write-back (Dec 2024) following a transition to the **Assam Gratuity Fund Scheme**. * **Shareholder Returns:** While no ordinary dividend was recommended for **FY24/25**, the Board recommended **₹1.28 crore** to clear arrears for **7.75% Cumulative Redeemable Preference Shares** for the years **2016-17** and **2017-18**. * **Revenue Distribution (Consolidated FY25):** India (**₹38,373.56 Lakhs**) vs. International (**₹5,944.33 Lakhs**). --- ### **Risk Management and Macroeconomic Exposure** GACL employs a formal risk management framework using **'Risk Champions'** to monitor sector-specific and financial vulnerabilities. * **Interest Rate Sensitivity:** The company has seen a shift toward variable-rate debt. As of **March 2025**, **68.26%** of borrowings were at variable rates. A **50 bps** increase in rates would impact **Profit Before Tax** by **₹47.45 Lakhs**. * **Currency & Credit Risk:** The company manages exposure via **forward exchange contracts** (non-speculative). Credit risk is monitored through an **Expected Credit Loss (ECL)** aging matrix; trade receivables typically carry terms of **30 to 180 days**. * **Geopolitical & Climatic Risks:** The Textile division remains vulnerable to **Russia-Ukraine** and **Middle East** conflicts which suppress demand. The Tea/Macadamia segments face climate volatility, evidenced by the impact of **Cyclone Freddy** in Malawi. --- ### **Governance and Leadership Stability** The company has secured long-term leadership to navigate its current recovery and expansion phase: * **CEO/MD:** **Mr. Mahesh Sodhani** re-appointed until **March 31, 2027**. * **Board:** Key Independent Directors re-appointed for a **5-year term** ending in **2029**. * **Workforce:** The company maintains a large labor force of **7,058 permanent employees** (as of March 2024).