Terai Tea Co (530533)

Score breakdown: P/E: 0/3 · ROCE: 0/2 · Growth: 2/2 · Dividend: 0/1

Key Financials

Strengths

• Trades at 0.74x book value (₹106.55 vs ₹143.57), offering asset-backing margin of safety
• Latest quarter returned to a small positive profit: sales ₹11 Cr and net profit ₹2 Cr
• Piotroski F-Score of 6/9 suggests acceptable near-term financial health despite weak operations
• ROCE is positive at 3.05%, so operating assets still generate some return

Concerns

• Sales growth of -68.12% signals severe shrinkage or distress at the operating level
• ROE of -7.27% shows ongoing shareholder value erosion, not compounding
• P/E of 0.00 and zero dividend mean no reliable earnings or income support for valuation
• Promoter holding and debt/equity data are missing; in a small-cap tea business those are critical governance and leverage unknowns

AI Analysis

Let's look at Terai Tea Co as a businessman would. The first thing I see is a small tea enterprise, ₹75 crore in market value, selling at ₹106.55 against stated book value of ₹143.57. In Graham's language, that is a 26% discount to net assets. But a cheap price can be a trap if the business is bleeding value. Tea is a commodity product; there is no pricing power and no obvious moat. The numbers tell a difficult story: annual sales have collapsed by 68.12% and return on equity is -7.27%. That means the company is not earning on the equity I would own; it is chewing up shareholder capital. ROCE of 3.05% is below any reasonable cost of capital. The 425.58% profit growth sounds impressive, but it is coming off a crushed base and the latest quarter's ₹11 crore sales with ₹2 crore profit is too small and too fresh to call a durable turnaround. P/E of 0.00 and no dividend confirm that earnings power is absent today; I am not being paid to wait. The Piotroski F-Score of 6 out of 9 gives modest comfort on the balance sheet, but I do not know promoter holdings or debt details, and in small-cap India that is a serious unknown. This is an asset play, not a compounding machine. I can only make money if management unlocks the book value—through operations, sale, or liquidation. Until I see stable sales, positive ROE, and honest capital allocation, I would keep this on my watchlist, not in my portfolio. Price below book is necessary but not sufficient. In Buffett's words: it's far better to buy a wonderful business at a fair price than a fair business at a wonderful price.

Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer