McLeod Russel mulls diversification, in discussion with consultants

McLeod Russel India is in discussion with multiple consultants for a possible diversification in the periphery of tea and agri business. The company is expected to gather the responses from consultants in another three months' period.

“We have not charted out any specific niche criterion to the consultants but have asked for their advice for a possible diversification within our periphery of business,” Aditya Khaitan, managing director at  Mcleod Russel India said after the annual general meeting here on Wednesday.

The plan to look for new avenues of growth is also being seen as a move to hedge against volatile  weather and rain deficiency. The company has also taken up irrigation and water conservation projects in its gardens in Assam.  

Among the possible new business avenues, branded packaged tea is seen as one of the probable areas where the company could make a foray. “We are open to the idea of branded tea but nothing has been finalised and that is why we are looking for consultants to advise us,” added Khaitan.

According to Khaitan, the pie of bought leaves into the company's total production would also increase in the next four years. “At present, out of 90 million kg of total production, 25 million kg is bought from outside growers and this share was likely to double in the next four - five years,” he added.   

Meanwhile, the company reported net loss of Rs 32 crore as againstRs 26.21 crore. Net sales for the quarter under review stood at Rs 99.38 crore compared to Rs 174.45 crore, dip of over 43 per cent.