Bengal Tea & Fab (532230)

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

Key Financials

Strengths

• Reasonable valuation: P/E 14.04 and P/B 1.27 against book value ₹129.75.
• Strong recent momentum: sales growth 35.79% and latest quarter net profit of ₹5 Cr on ₹20 Cr sales.
• Piotroski F-Score 7/9 suggests improving fundamentals.
• Low PEG ratio of 0.03, though partly due to the unusual 1000% profit growth.

Concerns

• Mediocre return profile: ROE 7.85% and ROCE 5.22% indicate limited competitive advantage in a commodity tea business.
• 1000% profit growth is likely a low-base or one-off effect and not yet proven sustainable.
• Dividend yield of 0.96% is low; tea earnings are vulnerable to weather, prices and cost inflation.
• Key governance data unavailable: debt/equity and promoter holding are not disclosed.

AI Analysis

Bengal Tea & Fab gives me a familiar feeling: a small tea company that looks statistically cheap but requires patience. At ₹165, the market cap is only ₹149 Cr, while book value is ₹129.75 per share, so I am paying 1.27 times equity. That is not demanding. The P/E of 14.04 is reasonable, and the 35.79% sales growth attracts attention. But I have to look through the window dressing. Profit growth of 1000% is a number that usually comes from a very low base or one-time gains; it is not a reliable measure of economic value. The latest quarter, with ₹20 Cr sales and ₹5 Cr net profit, is encouraging, but one quarter of tea does not make a moat. Return on equity is only 7.85%, and return on capital is just 5.22%. A business earning that kind of return on capital cannot command a wide economic castle. Tea is a commodity, and without strong brands or cost advantages, margins can be volatile. The Piotroski score of 7 out of 9 says the financial position is improving, which is good, but I am uncomfortable with the missing debt and promoter holding details. A dividend yield of 0.96% offers little comfort while I wait. Graham would ask: is there a margin of safety? At 1.27 times book, perhaps a little. But I want to see several more quarters of this profitability before I call it a true opportunity. I will let the business prove itself before my capital follows. The price is near its 52-week high, so I am not paying rock bottom, I am paying for hope. Hope is not an investment strategy.

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