Diana Tea Company Limited

Consumer Defensive — Farm Products · BSE

₹28.89+₹0.70 (+2.48%)

DalalBaazaar Score

52 / 100

🟡 Moderate

Verdict

NEUTRAL

Risk

Moderate

Driven by short-term liabilities exceed short-term assets, micro-cap size, which brings thin liquidity.

In simple words: The business is earning a fairly low return on the money invested in it, with both sales and profits growing well. Short-term liquidity is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:03 pm

Understanding the Business

Company site ↗

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

What does this company do?

Diana Tea Company Limited engages in cultivation, manufacture, and sale of tea in India. The company offers packet and bulk tea, as well as wooden keddies. It also operates tea estates. The company was incorporated in 1911 and is based in Kolkata, India.

IndustryFarm Products

SectorConsumer Defensive

Employees3,616

Annual revenue₹88 Cr

How does it make money?

Turns over ₹88 Cr a year. Of every ₹100 of sales, about ₹2 reaches shareholders as profit, with ₹7 left at the operating level before interest, tax and depreciation. Each of its 3,616 employees supports ₹2.4 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹2.4 lakh

Who are its competitors?

The closest listed comparisons in its industry are HINDUSTAN UNILEVER LTD., ITC LTD, NESTLE INDIA LIMITED, BRITANNIA INDUSTRIES 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 6.0% 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 +16% while net margin moved -161% 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+16%

Margin effect-161%

DalalBaazaar Score

52/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Revenue CAGR of only 5.0% — barely ahead of inflation

Quality vs. Valuation

Company Quality

46/ 100

Average

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

Valuation

83/ 100

Cheap

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

A reasonable business at a reasonable price — neither the quality nor the valuation stands out in either direction.

Historical Valuation

Current P/E

7.8x

2Y Median

185.4x

28 monthly readings · mean 167.3x · range 24.3x–261.3x

Sector Median

43.3x

median of 4 sector peers

🟢Current valuation is approximately 96% below its 2y median of 185.4x. Cheaper than its own history, which is worth a reason too: the market may be pricing in something the backward-looking numbers do not show.

🟢Against its sector it trades 82% below the peer median of 43.3x.

vs. its own history

Cheap

185.4x median over 28 months · -96%

vs. sector peers

Cheap

43.3x median of 4 peers · -82%

vs. generic bands

Cheap

Below 15x

EV/EBITDA

12.7x

PEG

—

What's Good / What's Bad

🟢 What's Going Well4

Margins are improving
EBITDA margin is up from 0.6% to 7.3% over 3 years.
Cash flow has turned positive
Free cash flow moved from negative to positive over 3 years.
Return on equity is rising
ROE has improved from -3.7% to 2.7%.
Return on capital is rising
ROCE has improved from -1.6% to 6.0%.

🔴 What Needs Attention0

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

Red Flags

3 items require attention · 1 high · 2 watch

🔴Thin interest coverageFinancial
Operating profit covers interest only 1.5x — little room if earnings dip.
🟡Debt is increasingFinancial
Total debt is up 29% over 3 years.
🟡Short-term liquidity is tightFinancial
Current ratio of 0.78 — near-term obligations exceed near-term assets.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from 0.6% to 7.3%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Priced below its own history
The stock trades 96% below its own median multiple. If the business performs as it has and simply re-rates back to normal, that gap is return on its own.
Cheaper than its peers
It trades 82% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.

🔴 Bear CaseWhat could go wrong?

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.
Growth barely outpaces inflation
Revenue compounding at 5.0% a year is close to the rate prices rise, so the business is gaining little ground in real terms. That leaves the share price dependent on a re-rating rather than on earnings growth.
Earnings are hard to forecast
Profit has swung sharply from year to year, so any single year — good or bad — is a weak guide to the next. Cyclical earnings deserve lower multiples for that reason.
Size brings its own risk
Micro Cap businesses are thinly traded, so exits are harder in a falling market and single events move the price more than they would for a larger company.

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

1EBITDA margin holds above 5%✓ 7.3%
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.
3Interest cover stays above 3x✗ 1.5x
How much operating profit can fall before interest stops being comfortably covered.
4Revenue growth stays above 4% a year✓ 5.0% CAGR
Latest reported year was 30.7%. The bar is set below the established compounding rate, so ordinary variation does not trip it.
5Free cash flow remains positive✓ ₹2 Cr
Profit that never becomes cash eventually stops being profit.

Investment Checklist

6 / 11 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
✗ Short-term technical trend isn't bearish

Price history

Quick Metrics

6 good · 3 neutral · 2 weak

Market Cap

₹43 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

7.8x

Cheap

Cheap against the generic band

P/B Ratio

0.66x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹3.7

Profitable

Profitable on a per-share basis

ROE

2.7%

Weak

Weak capital efficiency

ROCE

6.0%

Weak

Low return on total capital employed

Debt/Equity

0.68x

Moderate

Moderate leverage

Revenue Growth (YoY)

30.7%

Healthy

Healthy top-line growth

Profit Growth (YoY)

231.5%

Healthy

Profits growing at a healthy clip

Dividend Yield

None

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

Free Cash Flow

₹2 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

Operating Margin

20.8%

Good

Healthy core-business profitability

Net Margin

6.0%

Average

Average bottom-line conversion

Current Ratio

0.78

Tight

Tight short-term liquidity

Beta (vs Nifty)

0.20

Defensive

Steadier than the market

52W Range Position

51%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

28.2 / 28.7

Bearish alignment (short < long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

52.6

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹76 Cr	₹73 Cr	₹71 Cr	₹88 Cr	+5.0%
EBITDA	₹0 Cr	₹5 Cr	₹0 Cr	₹6 Cr	+148.5%
EBITDA Margin	0.6%	6.9%	0.7%	7.3%	—
PAT (Net Profit)	-₹3 Cr	₹0 Cr	-₹5 Cr	₹2 Cr	—
EPS	₹-1.67	₹0.16	₹-3.06	₹1.17	—
ROE	-3.7%	0.3%	-7.1%	2.7%	—
ROCE	-1.6%	4.2%	-1.9%	6.0%	—
Total Debt	₹35 Cr	₹32 Cr	₹44 Cr	₹45 Cr	+8.9%
Free Cash Flow	-₹2 Cr	-₹1 Cr	-₹9 Cr	₹2 Cr	—

🟢 Revenue has grown at 5.0% a year over 3 years.

🟢 EBITDA has grown at 148.5% a year over 3 years.

🟢 EBITDA Margin has risen from 0.6% to 7.3% over 3 years (+6.8 pts).

🟢 PAT (Net Profit) has turned positive, from -₹3 Cr to ₹2 Cr.

🟢 EPS has turned positive, from ₹-1.67 to ₹1.17.

🟢 ROE has risen from -3.7% to 2.7% over 3 years (+6.4 pts).

🟢 ROCE has risen from -1.6% to 6.0% over 3 years (+7.7 pts).

🔴 Total Debt has grown at 8.9% a year over 3 years.

🟢 Free Cash Flow has turned positive, from -₹2 Cr to ₹2 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹122 Cr

Total Liabilities

₹56 Cr

Cash & Equivalents

₹6 Cr

Operating Cash Flow

₹6 Cr

Capex

-₹4 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

66.3%

Corporate Actions

Ex-Dividend Date

07 Sept 2022

Peer Comparison

Company	P/E	ROE
HINDUSTAN UNILEVER LTD.	42.5x	21.5%
ITC LTD	16.6x	27.4%
NESTLE INDIA LIMITED	59.8x	79.9%
BRITANNIA INDUSTRIES LTD	44.1x	51.0%

Recent News

1 mixed5 general

Top 15 Low-Price Stocks In India To Buy In October 2026

Samco, 17 Oct

Plantation Tea Penny Stocks in India 2027: 5 Picks

Univest, 17 Sept

Diana Tea Company seeks approval for ₹11 crore warrants at 115th AGM

scanx.trade, 19 Aug

Diana Tea AGM results show 98% support for all eight resolutions

scanx.trade, 11 SeptResults

🟡Mixed / dependsA results event. The figures on this page update once the new statements reach the data feed, which usually lags the announcement.

Unilever Sells Tea Subsidiary SariWangi

STiR Coffee and Tea Magazine, 12 Jan

Best Tea Stocks in India – Tea Stocks

Alice Blue, 06 Feb

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

StrongValuation

MiddlingFinancial Health · Profitability

WeakBusiness Quality · Growth · Risk

Points for each in the Score ↑

Unremarkable in both directions

A reasonable business at a reasonable price. Nothing here is alarming and nothing is compelling, which usually means the decision rests on things this data cannot see — the industry's direction, management's intent, and what else is available to you. 1 high-severity red flag sits above this conclusion and should be read first.

2 of 5 tripwires tripped — Debt / EBITDA falls below 3x; Interest cover stays above 3x · see Key things to watch ↑