Indong Tea Company Limited

Consumer Defensive — Farm Products · BSE

₹5.68−₹0.27 (−4.54%)

DalalBaazaar Score

36 / 100

🔴 Weak

Verdict

CAUTION

Risk

High

Driven by negative free cash flow, the company is currently loss-making, micro-cap size, which brings thin liquidity.

In simple words: The company is currently losing money, but sales are shrinking. Cash generation is currently the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:45 pm

Understanding the Business

Company site ↗

The 60-second version of Indong 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?

Indong Tea Company Limited manufactures and sells tea in India. The company offers black tea processed by the crush/cut, tear, and curl method. It also produces and sells dairy products, such as milk, urine, and cow-dung.

IndustryFarm Products

SectorConsumer Defensive

Employees1,289

Annual revenue₹23 Cr

How does it make money?

Turns over ₹23 Cr a year. Of every ₹100 of sales, about ₹-4 reaches shareholders as profit, with ₹10 left at the operating level before interest, tax and depreciation. Each of its 1,289 employees supports ₹1.8 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹1.8 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 -0.4% 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 +9% while net margin moved -167% 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+9%

Margin effect-167%

DalalBaazaar Score

36/ 100

Weak

Weighted across six categories. Every point is explained below.

✗ Return on equity is negative
✗ ROE has fallen by 3.5 points over the period

Quality vs. Valuation

Company Quality

33/ 100

Weak

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

Valuation

44/ 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.

vs. its own history

Not enough price and earnings history

vs. sector peers

Not enough peers with a usable P/E

vs. generic bands

N/A

No P/E — the company is lossmaking

EV/EBITDA

9.1x

PEG

—

What's Good / What's Bad

🟢 What's Going Well1

Very low debt
Debt/Equity of 0.17x leaves the balance sheet with plenty of headroom.

🔴 What Needs Attention2

Return on equity is falling
ROE has dropped from 2.2% to -1.4% — each rupee of shareholder capital earns less than it did.
Return on capital is falling
ROCE has declined from 3.7% to -0.4% — often a sign of competition or overexpansion.

Red Flags

6 items require attention · 4 high · 2 watch

🔴Thin interest coverageFinancial
Operating profit covers interest only -0.4x — little room if earnings dip.
🔴Free cash flow negative for 4 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 -₹1 Cr in the latest reported year.
🔴Significant margin compressionFinancial
EBITDA margin has fallen 15.5 points, from 25.7% to 10.2%.
🟡Interest coverage is deterioratingFinancial
Cover has fallen from 1.4x to -0.4x.
🟡Shareholders have been dilutedOwnership
Shares outstanding are up 29% over 3 years — each existing share owns a smaller slice of the company.

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 25.7% to 10.2%. 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 4.4x 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 3.0% 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.
Returns on shareholder capital are falling
ROE has dropped from 2.2% to -1.4%. 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.
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.

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

1EBITDA margin holds above 8%✓ 10.2%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Debt / EBITDA falls below 3x✗ 4.4x
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✗ -₹1 Cr
Profit that never becomes cash eventually stops being profit.
4Interest cover stays above 3x✗ -0.4x
How much operating profit can fall before interest stops being comfortably covered.
5Revenue growth stays above 4% a year✗ 3.0% CAGR
Latest reported year was -48.3%. The bar is set below the established compounding rate, so ordinary variation does not trip it.

Investment Checklist

4 / 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

2 good · 2 neutral · 7 weak

Market Cap

₹11 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

Not meaningful

Loss-making

Earnings are negative, so a P/E multiple can't be read here

P/B Ratio

0.18x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹-0.44

Loss-making

Negative earnings per share — the business is losing money

ROE

-1.4%

Weak

Weak capital efficiency

ROCE

-0.4%

Weak

Low return on total capital employed

Debt/Equity

0.17x

Low

Conservative leverage

Revenue Growth (YoY)

-48.3%

Shrinking

Sales are contracting

Profit Growth (YoY)

-356.2%

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

-₹1 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

ROA

-0.4%

Weak

Assets generate little profit

Operating Margin

-18.9%

Weak

Thin margins leave little room for error

Net Margin

-3.6%

Weak

Very little revenue reaches the bottom line

Current Ratio

1.00

Adequate

Adequate, but no real cushion

Beta (vs Nifty)

-0.14

Defensive

Steadier than the market

52W Range Position

Near low

Near its 52-week low

Technical Snapshot

SMA 20 / SMA 50

6.2 / 7.1

Bearish alignment (short < long)

Price vs SMA 200

Below

Long-term downtrend

RSI (14)

45.1

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹21 Cr	₹21 Cr	₹30 Cr	₹23 Cr	+3.0%
EBITDA	₹5 Cr	₹1 Cr	₹3 Cr	₹2 Cr	-24.3%
EBITDA Margin	25.7%	6.9%	11.5%	10.2%	—
PAT (Net Profit)	₹1 Cr	-₹1 Cr	₹0 Cr	-₹1 Cr	—
EPS	₹1.07	₹-0.9	₹0.17	—	—
ROE	2.2%	-2.8%	0.5%	-1.4%	—
ROCE	3.7%	-0.7%	1.8%	-0.4%	—
Total Debt	₹9 Cr	₹10 Cr	₹10 Cr	₹10 Cr	+6.1%
Free Cash Flow	-₹7 Cr	-₹6 Cr	-₹12 Cr	-₹1 Cr	—

🟢 Revenue has grown at 3.0% a year over 3 years.

🔴 EBITDA has shrunk at 24.3% a year over 3 years.

🔴 EBITDA Margin has fallen from 25.7% to 10.2% over 3 years (-15.5 pts).

🔴 PAT (Net Profit) has turned negative, from ₹1 Cr to -₹1 Cr.

🔴 ROE has fallen from 2.2% to -1.4% over 3 years (-3.5 pts).

🔴 ROCE has fallen from 3.7% to -0.4% over 3 years (-4.1 pts).

🔴 Total Debt has grown at 6.1% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹78 Cr

Total Liabilities

₹18 Cr

Cash & Equivalents

₹0 Cr

Operating Cash Flow

₹6 Cr

Capex

-₹7 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

72.2%

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

Indong Tea Company board meets on May 29 for FY26 results

scanx.trade, 25 MayResults

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

Plantation Tea Penny Stocks in India 2027: 5 Picks

Univest, 17 Sept

Indong Tea promoter Hariram Garg buys 16,000 shares on market

scanx.trade, 31 Aug

Indong Tea Company Ltd's Rs 13 crore public issue on BSE SME platform opens for subscription on February 9

Business Standard, 06 Feb

Indong Tea Company Promoter Hariram Garg Sells 16,000 Equity Shares in Open Market

scanx.trade, 24 Mar

Indong Tea promoter Hariram Garg buys 4,000 shares for ₹32,133

scanx.trade, 12 Sept

Watch Items

Revenue growth is negative (-48.3%) on the latest reported period — check if this is one-off or a trend.
Trading very close to its 52-week low — worth checking whether this reflects a temporary setback or a structural problem.
Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

MiddlingFinancial Health · Valuation

WeakBusiness Quality · 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; Revenue growth stays above 4% a year · see Key things to watch ↑