Goodricke Group Limited

Consumer Defensive — Farm Products · BSE

₹224.75+₹1.05 (+0.47%)

DalalBaazaar Score

47 / 100

🟡 Moderate

Verdict

NEUTRAL

Risk

High

Driven by high debt relative to equity, 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. Debt is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 6:10 pm

Mixed / neutral. No major red flags jump out, but nothing here screams "obviously cheap" either. This is a name that needs a peer comparison and a view on near-term earnings triggers before sizing a position.

Understanding the Business

Company site ↗

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

What does this company do?

Goodricke Group Limited cultivates, manufactures, and sells tea in India and internationally.

IndustryFarm Products

SectorConsumer Defensive

Employees19,919

Annual revenue₹798 Cr

How does it make money?

Turns over ₹798 Cr a year. Of every ₹100 of sales, about ₹3 reaches shareholders as profit, with ₹6 left at the operating level before interest, tax and depreciation. Each of its 19,919 employees supports ₹4.0 lakh of revenue a year, the signature of a people-led business.

EBITDA margin5.6%

Net margin3.2%

Revenue / employee₹4.0 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.

HINDUSTAN UNILEVER LTD.P/E 42.5x · ROE 21.5%

ITC LTDP/E 16.6x · ROE 27.4%

NESTLE INDIA LIMITEDP/E 59.8x · ROE 79.9%

BRITANNIA INDUSTRIES LTDP/E 44.1x · ROE 51.0%

What is its competitive advantage?Little sign of one

Returns on capital of 6.6% 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.

ROCE6.6%

ROE8.4%

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 -10% while net margin moved -8847% 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-10%

Margin effect-8847%

DalalBaazaar Score

47/ 100

Moderate

Weighted across six categories. Every point is explained below.

✗ Revenue has contracted at 3.3% a year

Quality vs. Valuation

Company Quality

42/ 100

Weak

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

Valuation

80/ 100

Cheap

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

Optically cheap, but the underlying business scores poorly. Cheap-and-weak is what a value trap looks like from the outside — the low price may be deserved.

Historical Valuation

Current P/E

7.7x

1.3Y Median

19.0x

16 monthly readings · mean 18.9x · range 15.8x–21.0x

Sector Median

43.3x

median of 4 sector peers

🟢Current valuation is approximately 60% below its 1.3y median of 19.0x. 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

19.0x median over 16 months · -60%

vs. sector peers

Cheap

43.3x median of 4 peers · -82%

vs. generic bands

Cheap

Below 15x

P/E (Trailing)

7.7x

P/B

1.60x

EV/EBITDA

11.1x

PEG

—

Dividend Yield

0.89%

What's Good / What's Bad

🟢 What's Going Well6

Margins are improving
EBITDA margin is up from 3.4% to 5.6% over 3 years.
Debt is being paid down
Total debt is down 72% 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 -0.1% to 8.4%.
Return on capital is rising
ROCE has improved from 1.9% to 6.6%.
Valuation below its historical average
At 7.7x the stock trades 60% below its own median of 19.0x.

🔴 What Needs Attention0

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

Red Flags

1 item require attention · 1 high

🔴High leverageFinancial
Debt/Equity of 6.13x — earnings must service borrowings before shareholders see anything.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Margin expansion has further to run
EBITDA margin has risen from 3.4% to 5.6%. If that holds, profit compounds faster than sales and today's multiple looks cheaper in hindsight than it does now.
Deleveraging frees up earnings
Debt is down 72% over 3 years. Every rupee of interest not paid drops to the bottom line, so profit can grow even if revenue does not.
Priced below its own history
The stock trades 60% 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?

Leverage amplifies any setback
Debt/Equity of 6.13x. Interest is payable whether or not the business has a good year.
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 4%✓ 5.6%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Free cash flow remains positive✓ ₹50 Cr
Profit that never becomes cash eventually stops being profit.
3Debt / EBITDA stays below 2x✓ 0.4x
The ratio lenders write covenants against; it survives a small or negative equity base, unlike Debt/Equity.
4ROCE stays above 8%✗ 6.6%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.
5Interest cover stays above 4x✓ 4.1x
How much operating profit can fall before interest stops being comfortably covered.

Investment Checklist

7 / 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

5 good · 4 neutral · 2 weak

Market Cap

₹485 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

7.7x

Cheap

Cheap against the generic band

P/B Ratio

1.60x

Fair

Moderate premium to the company's book value

EPS (TTM)

₹29.27

Profitable

Profitable on a per-share basis

ROE

8.4%

Moderate

Moderate capital efficiency

ROCE

6.6%

Weak

Low return on total capital employed

Debt/Equity

6.13x

High

High leverage

Revenue Growth (YoY)

21.1%

Healthy

Healthy top-line growth

Profit Growth (YoY)

1178.4%

Healthy

Profits growing at a healthy clip

Dividend Yield

0.89%

Modest

Small cash return — most of the return has to come from the price

Free Cash Flow

₹50 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

CMP

₹224.75

Operating Margin

14.6%

Average

Average margins

Net Margin

7.5%

Average

Average bottom-line conversion

Current Ratio

1.45

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.12

Defensive

Steadier than the market

52W Range Position

77%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

226.4 / 222.4

Bullish alignment (short > long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

44.7

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹882 Cr	₹824 Cr	₹929 Cr	₹798 Cr	-3.3%
EBITDA	₹30 Cr	-₹38 Cr	₹36 Cr	₹44 Cr	+14.5%
EBITDA Margin	3.4%	-4.6%	3.9%	5.6%	—
PAT (Net Profit)	-₹0 Cr	-₹69 Cr	₹20 Cr	₹26 Cr	—
EPS	₹-0.15	₹-32.08	₹9.29	₹11.83	—
ROE	-0.1%	-28.7%	7.4%	8.4%	—
ROCE	1.9%	-15.1%	6.2%	6.6%	—
Total Debt	₹68 Cr	₹126 Cr	₹77 Cr	₹19 Cr	-35.0%
Free Cash Flow	-₹12 Cr	-₹44 Cr	₹29 Cr	₹50 Cr	—

🔴 Revenue has shrunk at 3.3% a year over 3 years.

🟢 EBITDA has grown at 14.5% a year over 3 years.

🟢 EBITDA Margin has risen from 3.4% to 5.6% over 3 years (+2.2 pts).

🟢 PAT (Net Profit) has turned positive, from -₹0 Cr to ₹26 Cr.

🟢 EPS has turned positive, from ₹-0.15 to ₹11.83.

🟢 ROE has risen from -0.1% to 8.4% over 3 years (+8.5 pts).

🟢 ROCE has risen from 1.9% to 6.6% over 3 years (+4.8 pts).

🟢 Total Debt has shrunk at 35.0% a year over 3 years.

🟢 Free Cash Flow has turned positive, from -₹12 Cr to ₹50 Cr.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹599 Cr

Total Liabilities

₹295 Cr

Total Debt

₹19 Cr

Cash & Equivalents

₹10 Cr

Operating Cash Flow

₹68 Cr

Capex

-₹18 Cr

Shareholding (proxy)

Institutional Holding

0.3%

Insider Holding

76.1%

Corporate Actions

Dividend Rate

₹2

Ex-Dividend Date

22 Jul 2026

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

2 positive4 general

Goodricke Group net profit rises 1,183% to ₹40.87 crore in Q1FY27

scanx.trade, 12 AugResults

🟢Potentially positiveReported improvement. Check whether it came from volume, price or a one-off item before treating it as a trend.

Goodricke Group standalone net profit rises 1181.19% in the June 2026 quarter

Business Standard, 12 AugResults

🟢Potentially positiveReported improvement. Check whether it came from volume, price or a one-off item before treating it as a trend.

Goodricke Group Share Price: Today’s 10.19% Decline

Univest, 02 Sept

Tea Stocks In Focus: Tata Consumer, CCL Products, Mcleod Russel Among Others Trade Mix Amid Fall In Auction Prices

NDTV Profit, 31 Aug

Goodricke Group to hold 50th AGM on July 29, 2026

scanx.trade, 29 Jul

GOODRICKE Share Price

Upstox, 02 Apr

Watch Items

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

DalalBaazaar Thesis

🔴Business QualityWeak8.7/20

🟡Financial HealthAdequate12.3/20

🔴GrowthWeak2.4/20

🟡ProfitabilityModerate8.3/15

🟢ValuationAttractive11.8/15

🔴RiskHigh3.9/10

Cheap, but for a reason

The low price is the whole case here, and the business underneath scores poorly. Cheap-and-weak is what a value trap looks like from the outside — it needs a specific reason the numbers are about to improve, not just the observation that they are low. 1 high-severity red flag sits above this conclusion and should be read first.

This thesis breaks if

✓EBITDA margin holds above 4%5.6%
✓Free cash flow remains positive₹50 Cr
✓Debt / EBITDA stays below 2x0.4x
✗ROCE stays above 8%6.6%
✓Interest cover stays above 4x4.1x