At-Tahur Ltd Reports Strong Growth in FY23, Eyes Diversification

Islamabad, At-Tahur Ltd, known for its brand PREMA, held a corporate briefing session to discuss its financial performance in fiscal year 2023 and to provide insights into its future strategy. The company reported significant revenue growth and plans to diversify beyond its dairy product line.

According to AKD Research, At-Tahur Ltd’s revenue reached PKR 4.90 billion in FY23, marking a 50% increase from the previous year. This growth was attributed to a combination of price escalation and volume growth, with gross margins standing at 58.2%, slightly lower than the 60% recorded in FY22. The company's retail operations extend throughout the Northern part of Pakistan, including Punjab, AJK, and KPK, while relying on third-party distributors in the South, covering Sindh and Balochistan.

The management highlighted the positive responses to the company's juice and ice tea segments, indicating a strategic shift towards becoming a broader food company. Despite the logistical challenges, the company successfully distributes pasteurized milk to the South, with transport times to Karachi and other areas being only 24-36 hours. The average shelf life of its milk is 8-9 days, which increases during the winter.

At-Tahur Ltd’s focus remains on the sustainable growth of its pasteurized milk segment, supported by a 6% annual growth in its indigenous herd. Consequently, the company does not plan to import cattle in the next 6-12 months. The cost factors, including feed and fodder costs, and the sale price of raw milk to farmers were also discussed.

The company recently procured American genetic cows, leading to improved milking yields. While the winter season generally brings better yields, it depends on the quality of the environment and feed provided.

Looking at export opportunities, At-Tahur Ltd sees potential in Afghanistan and the Middle East. However, the management cautioned that any hasty move towards exports without adequate planning could risk not meeting domestic demand. Regarding the social boycotts of multinational corporations (MNCs), the company noted that consumers are price-sensitive and MNCs have the capability to reduce prices, thus limiting the impact of these boycotts.

The net revenue breakup of At-Tahur Ltd shows that the milk segment accounts for 65%, while other products like cheese and yogurt constitute 35%. Punjab remains the company’s largest market, contributing 60% of total sales.

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