TREET Group is composed of the holding company Treet Corporation (TREET) and its subsidiaries First Treet Manufacturing Modaraba (FTMM), Treet Battery (TBL), Renacon Pharma, Treet Trading and Treet Holdings. In FY24, on a consolidated basis, revenue stood at Rs25.09bn, with Blades, Battery, Corrugated Boxes, Pharma Products, and Soaps contributing 43.6%, 34.8%, 10.8%, 5.5%, and 5.3% to the revenue respectively.
Manufacturing Capacity: TREET has a manufacturing capacity of 2,230mn units of Blades, 30K MT of Corrugated Boxes, 18k units of bikes, 1.2mn units of Batteries and 2.4mn session of Hemodialysis concentrates.
Treet Battery: Treet Battery (TBL) is a listed subsidiary of TREET. It carries out business as manufacturers, assemblers, processors, producers, suppliers, sellers, importers, exporters, makers, fabricators and dealers in all batteries, including lead acid batteries, deep cycle batteries, lithium batteries, nickel-cadmium batteries, nickel metal hydride batteries, absorbed glass mat (AGM) batteries, etc. TREET holds 95.68% of TBL as of June 30, 2024. Treet battery was demerged from First Treet Manufacturing Modaraba. The subsidiary’s main brand is Daewoo Batteries.
First Treet Manufacturing Modaraba (FTMM) is also a listed subsidiary. FTMM manufactures and sells corrugated boxes and soaps. TREET holds 97.11% of FTMM as of June 30, 2024.
Renacon Pharma manufactures all types of formulations of hemodialysis concentration in powder and solution form for all brands of machines. Treet Holds 55.86% of Renacon as of June 30, 2024.
Other unlisted companies of Treet, Treet holdings is engaged in the assembling and sale of motor bike and rickshaws; Treet Power is planning to set up an Electric Power Generation Project for generating, distributing and selling of Electric Power, which is kept in abeyance to complete other projects of the Group and Treet HR management is engaged in the business of rendering professional and technical services and providing related workforce to the host companies/customers under service agreements.
TREET also has a listed associate, Loads Limited (LOADS), which manufactures radiators, exhaust systems and other components for the automotive industry.
Latest Developments and Future Outlook:
During the year, the company invested in two brands: Shaving foam products and the existing Blades and Razor segment. The company sees huge potential in the newly launched Shaving foam product and is confident it will capture the market.
TREET turnover for 1QFY25 was Rs6,956mn, registering an increase of 4% over the same period last year. Gross profit at Rs1,626mn shows an improvement of 5.5% over the same period the previous year. Operating profit declined to Rs.607mn in 1QFY25 compared to Rs844mn in 1QFY24. Net Profit also declined to Rs27.5mn compared to Rs117.4mn.
Treet Battery (TBL) reported a Net Loss of Rs46mn in 1QFY25 compared to Rs0.5mn net profit in 1QFY24. Loss has been due to increased production and raw material costs. On March 05, 2024, the board of directors of TREET Corporation Limited decided to divest 11.3343% of the 95.68% shareholding held in TREET battery (TBL).
FTMM faced a challenging 1QFY25 with revenue and net profit decline with reduced performance of both soap and corrugated boxes segments.
Renacon Pharma is looking forward towards growth in exports, which remains a key focus area for the future. As part of this focus, it has participated in key regional trade fairs in the quarter to create greater visibility for its products. Revenue increased by 3.5% in 1QFY25 compared to 1QFY24. Revenue growth is mainly due to business coming from tenders for Government hospitals.
The company has strategically shifted towards valued focused offerings instead of volumetric growth.
The product mix consists of Double edge blades, Hygiene Razors and Disposal Razors. Local sales witnessed steady growth throughout the years with increased rural access. However, due to geopolitical concerns, export sales remained under pressure amid limited access towards foreign clients.
The company opened a sales and marketing office in Dubai to gain a better reach in the Middle East and Africa. The company also plans to open a warehouse in Dubai to further improve its global footprints under the subsidiary Treet Trading L.L.C.
The profitability of Treet battery was impacted by 52% YoY due to an increase in finance cost as the company is highly leveraged compared to peers.
The company sells Lead-Acid batteries, whereas DS-100 is the backup segment’s product.
Moreover, the management evaluates entry in lithium-ion batteries after conducting a market study and determining the demand. The product comes in the premium category and is more expensive than a Lead-Acid battery.
The Sale of corrugated boxes was underperformed due to a slowdown in economic activities. At the same time, the soap segment performed well in 2024.
Renacon Pharma is the market leader in Bicarbonate Hemodialysis, with a total market share of 60-65%. The company is also setting up a production facility in Faisalabad while focusing on the export market.
Courtesy- Topline Research