🧠 At a Glance
Neelamalai Agro isn’t your average chaiwala. It’s a tiny ₹231 Cr tea plantation stock that grows orthodox tea in the Nilgiris, loses money from operations, and yet sits on ₹515 Cr worth of investments—2.2x its own market cap. With P/E of 9.6 and price/book of 0.77, this is the ultimate value trap… or treasure hunt.
1. 🎯 Introduction with Hook
Neelamalai Agro is the kind of stock that lives in a time capsule:
- Founded in 1943
- Makes tea the old-school way
- Has no debt
- Still has just two estates in the Nilgiris
- And oh—barely any revenue but tons of investment income
If Benjamin Graham were Tamil, this might’ve been his kind of stock.
2. 🏭 WTF Do They Even Do?
Neelamalai operates two estates—Katary and Sutton, covering ~635 hectares in Nilgiris (Tamil Nadu). Their business model is as vintage as their logo:
- 🍃 Tea Cultivation
- 🏭 Tea Processing (Orthodox Only)
- 🌍 Domestic + Export Sales
They don’t do packet tea, FMCG retail, or e-commerce.
No D2C, no EV pivot, no AI. Just leaves. Literally.
3. 📊 Financials Overview – Profit, Margins, ROE, Growth
| Metric | FY21 | FY22 | FY23 | FY24 | FY25 |
|---|---|---|---|---|---|
| Revenue (₹ Cr) | 29 | 30 | 25 | 25 | 23 |
| EBITDA (₹ Cr) | 1 | -1 | -4 | -4 | -3 |
| Net Profit (₹ Cr) | 24 | 33 | 28 | 39 | 23 |
| EPS (₹) | 377.75 | 522.75 | 452.0 | 627.4 | 372.9 |
| ROE (%) | 14% | 17% | 12% | 9% | 8% |
😵 Operational loss for 5 straight years
💰 Profits driven entirely by other income (~₹27 Cr in FY25)
📉 3Y EPS CAGR: -9%
4. 📉 Valuation – Is It Cheap, Meh, or Crack?
- P/E: 9.6
- P/BV: 0.77
- Dividend Yield: 1.34% (₹30/share declared for FY25)
- ROE: 8.4% (modest, but better than peers)
- Investments: ₹515 Cr (as per balance sheet)
- Market Cap: ₹231 Cr
📌 Fair Value Estimation (SOTP)
- Investment Value (at 50% holding discount) = ₹515 Cr × 0.5 = ₹257.5 Cr
- Core Biz (agri/plantation loss-making) = ₹0
➡️ Edu Fair Value = ₹250 to ₹280 Cr
FV/Share = ₹4,100 – ₹4,600
CMP ₹3,721 → could be undervalued, but no operating growth
5. 🍿 What’s Cooking – News, Triggers, Drama
- 🧾 FY25 dividend of ₹30/share
- 🧑💼 AGM scheduled for August 18, 2025
- 🧮 Operating losses widen in FY25
- 🧺 Investments remain high – unclear breakdown
- 🤫 No debt, no plans, no buzz – stock is a sleepy elephant in the plantation jungle
6. 💰 Balance Sheet – How Much Debt, How Many Dreams?
| FY | Debt (₹ Cr) | Reserves (₹ Cr) | Investments (₹ Cr) | Total Liabilities (₹ Cr) |
|---|---|---|---|---|
| FY21 | 0 | 189 | 184 | 198 |
| FY23 | 0 | 245 | 241 | 254 |
| FY25 | 0 | 299 | 291 | 309 |
✅ Zero debt for a decade
📈 Investments = ~95% of total assets
😴 Nothing is reinvested into operations
7. 💵 Cash Flow – Sab Number Game Hai
| FY | CFO (₹ Cr) | CFI (₹ Cr) | CFF (₹ Cr) |
|---|---|---|---|
| FY23 | -₹2 | ₹4 | -₹1 |
| FY24 | -₹4 | ₹6 | -₹2 |
| FY25 | -₹4 | ₹7 | -₹3 |
💸 Operating cash flow negative every year
📥 Investing inflows = maturity of instruments
💵 Dividend funded from investment income, not tea business
8. 📐 Ratios – Sexy or Stressy?
| Metric | FY23 | FY24 | FY25 |
|---|---|---|---|
| ROCE % | 12% | 9% | 8% |
| ROE % | 12% | 9% | 8% |
| OPM % | -14% | -15% | -11% |
| Working Capital Days | -29 | -32 | 543 |
| CCC (Days) | 193 | 435 | 768 |
📦 Inventory Days: 917 (!), stuck tea much?
📉 CCC ballooning = working capital mismanagement
❌ OPMs consistently negative
9. 📊 P&L Breakdown – Show Me the Money
FY25 Breakdown:
- Revenue: ₹23 Cr
- EBITDA: -₹3 Cr
- Other Income: ₹27 Cr
- PBT: ₹23 Cr
- PAT: ₹23 Cr
- EPS: ₹373
In short: tea business = red
investment portfolio = green
10. 🤼 Peer Comparison – Who Else in the Game?
| Company | P/E | ROE % | OPM % | MCap (₹ Cr) |
|---|---|---|---|---|
| Tata Consumer | 86.1 | 7.0 | 14.1 | ₹1,08,800 |
| CCL Products | 38.4 | 17.1 | 17.9 | ₹11,900 |
| Jay Shree Tea | 8.5 | 10.8 | 4.4 | ₹325 |
| Goodricke | 67.1 | 2.9 | 2.1 | ₹490 |
| Neelamalai | 9.6 | 8.4 | -11.3 | ₹231 |
Looks cheap, but is essentially a tea-flavoured holding company.
11. 📌 Misc – Shareholding, Promoters, etc.
- Promoter Holding: 72.45% (very stable)
- Retail Holding: 26.8%
- No FIIs, DIIs
- Only ~1,600 shareholders
- Dividend Payout: ~8% of profits
- AGM: Aug 18, 2025
📊 Ultra illiquid
📦 May become delisting target someday
12. 👨⚖️ EduInvesting Verdict™
Neelamalai Agro is a rare stock that’s:
- 💸 Operating in loss
- 💰 Profitable via passive investments
- 🧊 Zero growth plans
- 🧾 Zero debt, high asset value
It’s the stock equivalent of a rich but retired zamindar: owns land, earns from old money, but no longer toils.
Edu Fair Value = ₹4,100 – ₹4,600 (SOTP)
CMP = ₹3,721
➡️ Slight undervaluation. But nothing’s brewing fast.
✍️ Written by Prashant | 📅 09 July 2025
Tags: Neelamalai Agro, Tea Stocks, Value Investing, Hidden Assets, Holding Company, Tamil Nadu Estates, EduInvesting
