James Warren Tea (538564)

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

Key Financials

Strengths

• Trading at ₹224 against book value of ₹363.37 (P/B 0.62), offering a 38% discount to stated net assets.
• Low headline valuation: P/E of 5.18 and PEG of 0.08 suggest the market is pricing in very little growth.
• Reported ROE of 58.15% and ROCE of 24.27% indicate existing capital has historically generated strong returns.
• Piotroski F-Score of 6/9 points to a moderately healthy financial position, not a distressed balance sheet.

Concerns

• Sales growth is sharply negative at -32.47%, showing the business is shrinking at the top line.
• Latest quarter is a net loss of ₹1 Cr on ₹35 Cr sales; profitability is not yet stable.
• Tea is a commodity business with no clear moat; the 67.93% profit growth appears low-quality / low-base and may not persist.
• Debt-to-equity and promoter holding are N/A, leaving leverage and governance risks unquantified.

AI Analysis

Graham used to say price is what you pay, value is what you get. At ₹224, with a market cap of ₹83 Cr and book value of ₹363.37 per share, the P/B is just 0.62 — the market is telling me it has little faith in this tea maker. The headline P/E of 5.18 and PEG of 0.08 look absurdly cheap, but I must ask: are these earnings real and durable? Tea is a commodity. I see no moat, no pricing power, and the income statement confirms the trouble: sales have fallen 32.47%, and the latest quarter still produced a ₹1 Cr net loss on ₹35 Cr of sales. A 67.93% profit growth on top of a collapsing top line smells like cost savings, one-off gains, or a low base, not a franchise strengthening. The reported ROE of 58.15% and ROCE of 24.27% are eye-catching, but they lose value if the underlying business is shrinking. There is no dividend, so I cannot wait and get paid. The Piotroski F-score of 6/9 is acceptable, not compelling. Also, at ₹224 the stock is below the stated 52-week range — Mr. Market is extremely pessimistic. The margin of safety here is the asset backing: ₹363 of book value per share. If those assets are good, the downside is cushioned; if losses continue to melt the book, the apparent discount will vanish. Debt-to-equity and promoter holding are not disclosed, so I have blind spots. This is not a wonderful business, but it may be a wonderfully priced asset. My approach: invest only if I can verify asset quality, monitor quarterly cash flows, and accept the cyclical nature of tea. I would start small, if at all, and demand a recovery in sales before treating this as a compounding machine.

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