McLeod Russel India Limited

Consumer Defensive — Packaged Foods · NSE

₹51.66+₹4.69 (+9.99%)

DalalBaazaar Score

16 / 100

🔴 Poor

Verdict

HIGH RISK

Risk

Very High

Driven by negative shareholders' equity — the company owes more than it owns, short-term liabilities exceed short-term assets, the company is currently loss-making.

In simple words: The company owes more than it owns — years of losses have wiped out its net worth, with both sales and profits growing well. Solvency — whether it can keep funding itself at all — is the main factor to watch.

Decision support, not a buy or sell call.

As of 18 Oct 2026, 7:49 pm

Understanding the Business

Company site ↗

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

What does this company do?

McLeod Russel India Limited, together with its subsidiaries, engages in the cultivation and production, and sale of tea in India, the United Kingdom, and Europe. It operates tea estates and blending units. The company was founded in 1869 and is based in Kolkata, India.

IndustryPackaged Foods

SectorConsumer Defensive

Employees43,292

Annual revenue₹1,147 Cr

How does it make money?

Turns over ₹1,147 Cr a year. Of every ₹100 of sales, about ₹-11 reaches shareholders as profit, with ₹-1 left at the operating level before interest, tax and depreciation. Each of its 43,292 employees supports ₹2.6 lakh of revenue a year, the signature of a people-led business.

Revenue / employee₹2.6 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 -24.1% 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 -14% while net margin moved -86% 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-14%

Margin effect-86%

DalalBaazaar Score

16/ 100

Poor

Weighted across six categories. Every point is explained below.

✗ Shareholders' equity is negative — accumulated losses exceed the capital in the business

Quality vs. Valuation

Company Quality

15/ 100

Weak

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

Valuation

30/ 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

Multiples unreliable — equity base is negative

EV/EBITDA

—

PEG

—

What's Good / What's Bad

🟢 What's Going Well1

Debt is being paid down
Total debt is down 24% over 3 years.

🔴 What Needs Attention0

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

Red Flags

7 items require attention · 5 high · 2 watch

🔴Negative shareholders' equityFinancial
Liabilities exceed assets — accumulated losses have wiped out the company's net worth.
🔴Thin interest coverageFinancial
Operating profit covers interest only -1.6x — little room if earnings dip.
🔴Profit up while operating cash flow fallsFinancial
Reported profit rose but cash generated by operations declined — worth checking whether earnings are being supported by non-cash items or working capital.
🔴The company is lossmakingFinancial
Net profit of -₹124 Cr in the latest reported year.
🔴Significant margin compressionFinancial
EBITDA margin has fallen 9.2 points, from 7.8% to -1.4%.
🟡Interest coverage is deterioratingFinancial
Cover has fallen from -0.1x to -1.6x.
🟡Short-term liquidity is tightFinancial
Current ratio of 0.23 — near-term obligations exceed near-term assets.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Deleveraging frees up earnings
Debt is down 24% over 3 years. Every rupee of interest not paid drops to the bottom line, so profit can grow even if revenue does not.

🔴 Bear CaseWhat could go wrong?

Solvency comes before everything else
Liabilities exceed assets. Until net worth is rebuilt, the equity is a claim on a business that owes more than it owns, and further losses or a funding squeeze can leave shareholders with nothing.
Margins are being competed away
EBITDA margin has fallen from 7.8% to -1.4%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
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.
Several serious flags at once
5 high-severity checks triggered. Individually each has an explanation; together they raise the chance that something structural is wrong rather than a one-off.

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

1EBITDA margin holds above -3%✓ -1.4%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Interest cover stays above 3x✗ -1.6x
How much operating profit can fall before interest stops being comfortably covered.
3Free cash flow remains positive✓ ₹38 Cr
Profit that never becomes cash eventually stops being profit.

Investment Checklist

5 / 10 checks passed

✗ Shareholders' equity is positive (assets exceed liabilities)
✗ Strong return on capital employed (ROCE ≥ 15%)
✗ Healthy net margin (≥ 10%)
✓ Generates positive free cash flow
✗ 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

3 good · 4 neutral · 4 weak

Market Cap

₹540 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

Not available

No data

Source didn't return this field

EPS (TTM)

₹-8.92

Loss-making

Negative earnings per share — the business is losing money

ROE

Not meaningful

Negative equity

Return on equity can't be read when equity itself is negative

ROCE

-24.1%

Distorted

Distorted by the negative net worth — read this alongside the solvency flag, not on its own

Debt/Equity

Not meaningful

Negative equity

Shareholders' equity is negative, so this ratio can't be read

Revenue Growth (YoY)

21.0%

Healthy

Healthy top-line growth

Profit Growth (YoY)

37.6%

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

₹38 Cr

Cash generative

Generates cash even after funding its capex

More Metrics

Operating Margin

5.1%

Average

Average margins

Net Margin

-7.8%

Weak

Very little revenue reaches the bottom line

Current Ratio

0.23

Tight

Tight short-term liquidity

Beta (vs Nifty)

1.34

High swing

Swings more than the market in both directions

52W Range Position

46%

Mid-range

Technical Snapshot

SMA 20 / SMA 50

44.6 / 46.0

Bearish alignment (short < long)

Price vs SMA 200

Above

Long-term uptrend

RSI (14)

70.0

Overbought zone

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹1,329 Cr	₹1,118 Cr	₹1,172 Cr	₹1,147 Cr	-4.8%
EBITDA	₹104 Cr	-₹98 Cr	₹27 Cr	-₹16 Cr	—
EBITDA Margin	7.8%	-8.8%	2.3%	-1.4%	—
PAT (Net Profit)	-₹1,057 Cr	-₹312 Cr	-₹198 Cr	-₹124 Cr	—
EPS	₹-101.14	₹-29.83	₹-18.94	₹-11.82	—
ROE	-185.6%	-124.6%	-349.3%	—	—
ROCE	-114.7%	-38.2%	-6.9%	-24.1%	—
Total Debt	₹1,961 Cr	₹1,893 Cr	₹1,902 Cr	₹1,495 Cr	-8.6%
Free Cash Flow	₹150 Cr	₹16 Cr	₹48 Cr	₹38 Cr	-36.6%

🔴 Revenue has shrunk at 4.8% a year over 3 years.

🔴 EBITDA has turned negative, from ₹104 Cr to -₹16 Cr.

🔴 EBITDA Margin has fallen from 7.8% to -1.4% over 3 years (-9.2 pts).

🟢 ROCE has risen from -114.7% to -24.1% over 3 years (+90.7 pts).

🟢 Total Debt has shrunk at 8.6% a year over 3 years.

🔴 Free Cash Flow has shrunk at 36.6% a year over 3 years.

Balance Sheet & Cash Flow — FY2026

Total Assets

₹2,353 Cr

Total Liabilities

₹2,404 Cr

Cash & Equivalents

₹16 Cr

Operating Cash Flow

₹53 Cr

Capex

-₹15 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

16.3%

Corporate Actions

Ex-Dividend Date

01 Aug 2018

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%

Recent News

2 mixed1 negative3 general

Mcleod Russel India Share Price Target 2027 to 2030: Analyst Outl

Univest, 18 AugAnalyst view

🟡Mixed / dependsBroker commentary — an opinion about the price rather than new information about the business.

Price Band Hitters, June 30, 2026: Style Baaza, McLeod Russel Lead

HDFC Sky, 30 Jun

Benign Growth For McLeod Russel India Limited (NSE:MCLEODRUSS) Underpins Stock's 28% Plummet

Simply Wall Street, 09 Dec

Mcleod Russel India reports consolidated net loss of Rs 13.38 crore in the June 2026 quarter

Business Standard, 15 AugResults

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

McLeod Russel discloses pledge of promoter shares to NARCL

scanx.trade, 09 OctOwnership

🔴Potentially negativePromoter selling or pledging is a signal worth understanding, though the reason is often personal rather than about the business.

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

NDTV Profit, 31 Aug

Watch Items

Cross-check against the company's latest quarterly filing / investor presentation before acting.
1 metric couldn't be retrieved for this stock — this is more common for smaller or thinly-covered listings.
RSI is in overbought territory — momentum entries here carry more short-term pullback risk.

DalalBaazaar Thesis

WeakBusiness Quality · Financial Health · Growth · Profitability · Valuation · Risk

Points for each in the Score ↑

Avoid until solvency is resolved

McLeod Russel India Limited owes more than it owns. Whatever the operating numbers show, the equity is a residual claim on a business with negative net worth, and that question has to be settled before any of the rest is worth weighing. 5 high-severity red flags sit above this conclusion and should be read first.

1 of 3 tripwires tripped — Interest cover stays above 3x · see Key things to watch ↑