B & A Limited

Consumer Defensive — Packaged Foods · NSE

₹389.70−₹3.95 (−1.00%)

DalalBaazaar Score

32 / 100

🔴 Weak

Verdict

CAUTION

Risk

High

Driven by negative free cash flow, micro-cap size, which brings thin liquidity, a very high earnings multiple, which leaves little margin for disappointment.

In simple words: The business is earning a fairly low return on the money invested in it, though profits are falling even as sales grow. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:02 pm

Understanding the Business

Company site ↗

The 60-second version of B & A Limited — what it does, how it earns, and who it competes with, before any of the numbers below.

What does this company do?

B & A Limited, together with its subsidiaries, cultivates, produces, and sells black tea in India. It operates in three segments: Tea, Paper Sacks and Flexible Laminates. The company also operates tea estates. It also offers retail tea under the Gatoonga Tea Estate brand name.

IndustryPackaged Foods

SectorConsumer Defensive

Employees4,386

Annual revenue₹282 Cr

How does it make money?

Turns over ₹282 Cr a year. Of every ₹100 of sales, about ₹-1 reaches shareholders as profit, with ₹6 left at the operating level before interest, tax and depreciation. Each of its 4,386 employees supports ₹6.4 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹6.4 lakh

Who are its competitors?

The closest listed comparisons in its industry are NESTLE INDIA LIMITED, BRITANNIA INDUSTRIES LTD, TATA CONSUMER PRODUCT LTD, DABUR INDIA LTD. These are the companies its valuation and returns are measured against elsewhere in this report.

Compared side by side in Peers ↓

What is its competitive advantage?Little sign of one

Returns on capital of 4.5% are at or below what the capital likely costs. That is the financial pattern of a business competing largely on price, where advantage has to come from execution rather than position.

Peer median ROE51.0%

What has been driving growth?

Profit has moved mainly because margins changed, not because the business sold much more. Over 3 years revenue moved -3% while net margin moved -136% relative to itself. What this cannot tell you is which products, customers or geographies did the work — that lives in the segment disclosures of the annual report.

Revenue effect-3%

Margin effect-136%

DalalBaazaar Score

32/ 100

Weak

Weighted across six categories. Every point is explained below.

✗ Revenue has contracted at 1.0% a year
✗ Profit fell 147.8% in the latest year

Quality vs. Valuation

Company Quality

27/ 100

Weak

How good the business is, ignoring the share price entirely.

Valuation

42/ 100

Expensive

What you are being asked to pay, ignoring how good the business is.

Weak on business quality and not cheap enough to compensate.

Historical Valuation

Current P/E

165.1x

Sector Median

51.7x

median of 4 sector peers

⚠️Against its sector it trades 220% above the peer median of 51.7x.

vs. its own history

Not enough price and earnings history

vs. sector peers

Expensive

51.7x median of 4 peers · +220%

vs. generic bands

Expensive

Above 35x

EV/EBITDA

13.7x

PEG

—

What's Good / What's Bad

🟢 What's Going Well0

Nothing stands out as clearly improving on the years of data available.

🔴 What Needs Attention2

Return on equity is falling
ROE has dropped from 9.3% to -2.9% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 15.2% to 4.5% — often a sign of competition or overexpansion.

Red Flags

7 items require attention · 4 high · 3 watch

🔴Debt has risen sharplyFinancial
Total debt is up 266% over 3 years, from ₹30 Cr to ₹111 Cr.
🔴Thin interest coverageFinancial
Operating profit covers interest only 1.4x — little room if earnings dip.
🔴Free cash flow negative for 3 yearsFinancial
The business has not covered its capital spending from operations for several years running, which has to be funded externally.
🔴The company is lossmakingFinancial
Net profit of -₹4 Cr in the latest reported year.
🟡Interest coverage is deterioratingFinancial
Cover has fallen from 3.5x to 1.4x.
🟡Margins are compressingFinancial
EBITDA margin is down 3.2 points over 3 years.
🟡Receivables growing faster than salesFinancial
Receivables up 27% against revenue up -3% — sales are being booked faster than they are collected.

Investment Thesis

🟢 Bull CaseWhat could make this work?

No clear supporting case emerges from the available numbers.

🔴 Bear CaseWhat could go wrong?

Margins are being competed away
EBITDA margin has fallen from 8.8% to 5.7%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
The debt load needs earnings to hold up
Debt is 6.9x EBITDA. At that level a downturn in earnings turns a manageable balance sheet into a refinancing problem, and lenders get paid before shareholders.
Sales are being booked faster than collected
Receivables are up 27% against revenue up -3%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
A premium to the sector to defend
It trades 220% above the peer median. That premium needs a reason that persists, or it closes.
Returns on shareholder capital are falling
ROE has dropped from 9.3% to -2.9%. Each rupee of equity earns less than it did, so profit growth increasingly depends on raising more capital rather than on the existing base working harder.

🟡 Key Things to WatchMeasurable tripwires, set against where this company stands today

1EBITDA margin holds above 4%✓ 5.7%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Debt / EBITDA falls below 3x✗ 6.9x
Already stretched, so this is a reduction target rather than a level to hold. Around 3x is where lenders typically start attaching conditions.
3Free cash flow remains positive✗ -₹33 Cr
Profit that never becomes cash eventually stops being profit.
4Interest cover stays above 3x✗ 1.4x
How much operating profit can fall before interest stops being comfortably covered.
5ROCE stays above 8%✗ 4.5%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

4 / 10 checks passed

✗ Strong return on equity (ROE ≥ 15%)
✗ Strong return on capital employed (ROCE ≥ 15%)
✗ Healthy net margin (≥ 10%)
✗ Generates positive free cash flow
✓ Manageable leverage (Debt/Equity < 1.0)
✓ Adequate short-term liquidity (Current Ratio ≥ 1.0)
✓ Revenue growing year-over-year
✗ Profit growing year-over-year
✗ Not trading at an extreme valuation (P/E < 40x)
✓ Not buying right at the 52-week high

Price history

Quick Metrics

3 good · 3 neutral · 5 weak

Market Cap

₹121 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

165.1x

Expensive

Expensive — verify against sector peers

P/B Ratio

0.88x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹2.36

Profitable

Profitable on a per-share basis

ROE

-2.9%

Weak

Weak capital efficiency

ROCE

4.5%

Weak

Low return on total capital employed

Debt/Equity

0.68x

Moderate

Moderate leverage

Revenue Growth (YoY)

28.7%

Healthy

Healthy top-line growth

Profit Growth (YoY)

-147.8%

Falling

Profits are shrinking

Dividend Yield

None

No dividend yield reported — usually means no payout, but verify if one was recently initiated

Free Cash Flow

-₹33 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

Operating Margin

6.2%

Average

Average margins

Net Margin

0.2%

Weak

Very little revenue reaches the bottom line

Current Ratio

1.15

Adequate

Adequate, but no real cushion

Beta (vs Nifty)

0.16

Defensive

Steadier than the market

52W Range Position

62%

Mid-range

Technical Snapshot

RSI (14)

83.1

Overbought zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹291 Cr	₹289 Cr	₹263 Cr	₹282 Cr	-1.0%
EBITDA	₹26 Cr	₹20 Cr	₹24 Cr	₹16 Cr	-14.6%
EBITDA Margin	8.8%	7.0%	9.3%	5.7%	—
PAT (Net Profit)	₹11 Cr	₹11 Cr	₹8 Cr	-₹4 Cr	—
ROE	9.3%	8.1%	5.8%	-2.9%	—
ROCE	15.2%	11.1%	10.0%	4.5%	—
Total Debt	₹30 Cr	₹49 Cr	₹69 Cr	₹111 Cr	+54.1%
Free Cash Flow	₹2 Cr	-₹8 Cr	-₹12 Cr	-₹33 Cr	—

🟡 Revenue has been broadly flat over 3 years (-1.0% a year).

🔴 EBITDA has shrunk at 14.6% a year over 3 years.

🔴 EBITDA Margin has fallen from 8.8% to 5.7% over 3 years (-3.2 pts).

🔴 PAT (Net Profit) has turned negative, from ₹11 Cr to -₹4 Cr.

🔴 ROE has fallen from 9.3% to -2.9% over 3 years (-12.2 pts).

🔴 ROCE has fallen from 15.2% to 4.5% over 3 years (-10.7 pts).

🔴 Total Debt has grown at 54.1% a year over 3 years.

🔴 Free Cash Flow has turned negative, from ₹2 Cr to -₹33 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹321 Cr

Total Liabilities

₹159 Cr

Cash & Equivalents

₹12 Cr

Operating Cash Flow

-₹0 Cr

Capex

-₹32 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

81.5%

Peer Comparison

Company	P/E	ROE
NESTLE INDIA LIMITED	59.8x	79.9%
BRITANNIA INDUSTRIES LTD	44.1x	51.0%
TATA CONSUMER PRODUCT LTD	59.3x	7.5%
DABUR INDIA LTD	34.7x	17.2%

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Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.
RSI is in overbought territory — momentum entries here carry more short-term pullback risk.

DalalBaazaar Thesis

MiddlingValuation

WeakBusiness Quality · Financial Health · Growth · Profitability · Risk

Points for each in the Score ↑

Weak on the fundamentals

Poor scores on business quality without a price low enough to compensate. There is no obvious argument for owning this over a stronger company at a similar valuation. 4 high-severity red flags sit above this conclusion and should be read first.

4 of 5 tripwires tripped — Debt / EBITDA falls below 3x; Free cash flow remains positive; Interest cover stays above 3x; ROCE stays above 8% · see Key things to watch ↑