Diana Tea Co (530959)

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

Key Financials

Strengths

• Trades at 0.58 times book value, offering a margin of safety at ₹29.04 versus ₹50.23 book value.
• Sales growth of 25.28% and a latest quarter net profit of ₹5 Cr show positive momentum.
• Piotroski F-Score of 6/9 suggests improving financial health.
• PEG of 0.08 implies the market is not pricing in the recent earnings growth if it proves sustainable.

Concerns

• ROE is just 3.45% and ROCE is negative at -1.40%, reflecting weak capital efficiency.
• Zero dividend yield means investors get no income while waiting for a recovery.
• Tea is a commoditized business with no pricing power; the 386% profit jump comes from a low base and may not repeat.
• Key data like promoter holding and debt/equity are not disclosed, making governance and leverage hard to assess.

AI Analysis

When I look at Diana Tea, the first thing I see is a share selling at ₹29.04 against a book value of ₹50.23—just 0.58 times book. That catches any value investor's eye. But Graham taught us to ask why it is cheap. The answer, I think, lies in returns: ROE is only 3.45%, and ROCE is negative at -1.40%. The business is not earning its cost of capital. A wonderful price can still be a poor investment if the underlying economics are mediocre. The recent numbers offer hope: sales grew 25.28%, and profit jumped 386.24% off a low base. The latest quarter shows ₹31 Cr in sales and ₹5 Cr in net profit, so something may be changing. The Piotroski F-score of 6/9 points to improving fundamentals. A PEG of 0.08 is almost too good—it only makes sense if the growth is durable, and in tea, a commodity business, durability is suspect. I don't see a moat here. Tea is tea. Prices are dictated by auctions, weather, and costs. There is no pricing power, and with zero dividend yield, the shareholder isn't getting paid while waiting. Promoter holding isn't disclosed, and without that, I cannot judge alignment. So is this a bargain or a value trap? The balance sheet supports the stock—book value ₹50.23 and a P/B of 0.58—but poor returns on capital mean the assets aren't being deployed well. If management can sustain the recent profit momentum, the stock is cheap. If not, you are buying a low-return tea business simply because it is cheap. I would keep it on the watchlist, not marry it.

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