Terai Tea Company Limited

Consumer Defensive — Farm Products · NSE

₹130.33−₹5.65 (−4.16%)

DalalBaazaar Score

58 / 100

🟡 Moderate

Verdict

CAUTION

Risk

Moderate

Driven by negative free cash flow, micro-cap size, which brings thin liquidity.

In simple words: The business is earning a fairly low return on the money invested in it, 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, 6:05 pm

Caution warranted. Multiple fundamental metrics — flagged in red below — point to either valuation stretch, leverage risk, or weakening profitability. This doesn't mean avoid the stock outright, but it does mean the burden of proof is on the growth story to justify the current price.

Understanding the Business

Company site ↗

The 60-second version of Terai 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?

Terai Tea Company Limited engages in the production, distribution, and trading of tea in India. The company is involved in the trading of sugar, raw jute, and other merchandise. It engages in the real estate development, steel, garment, and food processing business.

IndustryFarm Products

SectorConsumer Defensive

Employees350

Annual revenue₹89 Cr

How does it make money?

Turns over ₹89 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 350 employees supports ₹25.3 lakh of revenue a year, the signature of a people-led business.

EBITDA margin-1.1%

Net margin10.8%

Revenue / employee₹25.3 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 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.

ROCE4.5%

ROE5.8%

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 -5% while net margin moved +672% 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-5%

Margin effect+672%

DalalBaazaar Score

58/ 100

Moderate

Weighted across six categories. Every point is explained below.

✓ Beta of 0.18 — historically steadier than the index
✗ Micro Cap: thinner liquidity and sharper drawdowns are normal
✗ Profits have swung sharply from year to year — earnings are hard to forecast
✗ Negative free cash flow means dependence on external funding

Quality vs. Valuation

Company Quality

55/ 100

Average

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

Valuation

87/ 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

13.0x

Sector Median

43.3x

median of 4 sector peers

🟢Against its sector it trades 70% below the peer median of 43.3x.

vs. its own history

Not enough price and earnings history

vs. sector peers

Cheap

43.3x median of 4 peers · -70%

vs. generic bands

Cheap

Below 15x

P/E (Trailing)

13.0x

P/B

0.54x

EV/EBITDA

—

PEG

0.14

Dividend Yield

None

What's Good / What's Bad

🟢 What's Going Well4

Return on equity is rising
ROE has improved from 0.9% to 5.8%.
Return on capital is rising
ROCE has improved from 2.2% to 4.5%.
Very low debt
Debt/Equity of 0.23x leaves the balance sheet with plenty of headroom.
Consistently profitable
Profitable in every one of the last 4 reported years.

🔴 What Needs Attention3

Margins are compressing
EBITDA margin has slipped from 0.7% to -1.1% over 3 years.
Free cash flow is negative
The business is not currently covering its capital spending from operations.
Receivables growing faster than sales
Receivables are up 51% against revenue growth of -5% — customers are taking longer to pay.

Red Flags

3 items require attention · 2 high · 1 watch

🔴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.
🔴Receivables growing faster than salesFinancial
Receivables up 51% against revenue up -5% — sales are being booked faster than they are collected.
🟡Free cash flow is negativeFinancial
Free cash flow was -₹6 Cr in the latest year.

Investment Thesis

🟢 Bull CaseWhat could make this work?

Cheaper than its peers
It trades 70% below the sector median. Either the market sees a problem the numbers do not show, or the discount closes.
Earnings have proved durable
Profitable in every one of the last 4 reported years. Consistency lowers the risk that any single bad year is structural rather than cyclical.

🔴 Bear CaseWhat could go wrong?

Margins are being competed away
EBITDA margin has fallen from 0.7% to -1.1%. If the trend continues, profit falls even on flat sales — and margin decline rarely reverses quickly.
Sales are being booked faster than collected
Receivables are up 51% against revenue up -5%. If customers keep taking longer to pay, reported profit will not turn into cash — and write-offs follow if some never do.
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.
Several serious flags at once
2 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%✓ -1.1%
Two points below today's level — enough room for noise, tight enough to catch real compression.
2Free cash flow remains positive✗ -₹6 Cr
Profit that never becomes cash eventually stops being profit.
3Interest cover stays above 3x✗ 2.6x
How much operating profit can fall before interest stops being comfortably covered.
4ROCE stays above 8%✗ 4.5%
Falling returns on capital are usually competition arriving, and show up here before they reach the margin.

Investment Checklist

6 / 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

5 good · 2 neutral · 4 weak

Market Cap

₹90 Cr

Micro Cap

Smaller company — thin liquidity and deep drawdowns are normal here

P/E (Trailing)

13.0x

Cheap

Cheap against the generic band

P/B Ratio

0.54x

Reasonable

Reasonable against the company's book value

EPS (TTM)

₹10.02

Profitable

Profitable on a per-share basis

ROE

5.8%

Weak

Weak capital efficiency

ROCE

4.5%

Weak

Low return on total capital employed

Debt/Equity

0.23x

Low

Conservative leverage

Revenue Growth (YoY)

-78.6%

Shrinking

Sales are contracting

Profit Growth (YoY)

34.2%

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

-₹6 Cr

Cash burning

Spending more cash than the operations bring in

More Metrics

CMP

₹130.33

Operating Margin

32.5%

Good

Healthy core-business profitability

Net Margin

10.5%

Good

Strong bottom-line conversion

Current Ratio

2.77

Comfortable

Healthy short-term liquidity

Beta (vs Nifty)

0.18

Defensive

Steadier than the market

52W Range Position

38%

Mid-range

Technical Snapshot

RSI (14)

58.1

Neutral momentum

Financial Trend (4-Year)

Metric	FY23	FY24	FY25	FY26	3Y CAGR
Revenue	₹93 Cr	₹108 Cr	₹103 Cr	₹89 Cr	-1.6%
EBITDA	₹1 Cr	-₹1 Cr	₹1 Cr	-₹1 Cr	—
EBITDA Margin	0.7%	-0.6%	0.5%	-1.1%	—
PAT (Net Profit)	₹1 Cr	₹5 Cr	₹4 Cr	₹10 Cr	+94.4%
EPS	₹1.9	₹4.49	₹5.35	₹13.95	+94.4%
ROE	0.9%	3.3%	2.3%	5.8%	—
ROCE	2.2%	3.2%	3.7%	4.5%	—
Total Debt	₹36 Cr	₹32 Cr	₹68 Cr	₹38 Cr	+2.0%
Free Cash Flow	-₹9 Cr	₹1 Cr	₹13 Cr	-₹6 Cr	—

🟡 Revenue has been broadly flat over 3 years (-1.6% a year).

🔴 EBITDA has turned negative, from ₹1 Cr to -₹1 Cr.

🔴 EBITDA Margin has fallen from 0.7% to -1.1% over 3 years (-1.8 pts).

🟢 PAT (Net Profit) has grown at 94.4% a year over 3 years.

🟢 EPS has grown at 94.4% a year over 3 years.

🟢 ROE has risen from 0.9% to 5.8% over 3 years (+4.9 pts).

🟢 ROCE has risen from 2.2% to 4.5% over 3 years (+2.3 pts).

🟡 Total Debt has been broadly flat over 3 years (2.0% a year).

Balance Sheet & Cash Flow — FY2026

Total Assets

₹213 Cr

Total Liabilities

₹47 Cr

Total Debt

₹38 Cr

Cash & Equivalents

₹1 Cr

Operating Cash Flow

-₹5 Cr

Capex

-₹0 Cr

Shareholding (proxy)

Institutional Holding

0.0%

Insider Holding

91.1%

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

Terai Tea Company Lower Circuit Today: Price, Data and Peers

Univest, 13 Oct

Volume Gainers Today: Hexaware, Terai Tea and Other Shares in Focus

HDFC Sky, 09 Oct

Terai Tea Co. Ltd. (NSE: TERAI) Falls 12.92% as Stock Movement Draws Market Attention

Kalkine India, 21 Sept

Terai Tea appoints Rajendra Kanodia as WTD at 53rd AGM on Sep 30

scanx.trade, 30 Sept

Terai Tea Co Ltd

Equitypandit, 21 Aug

Terai Tea Company Submits Q4 FY26 Dematerialisation Certificate to Stock Exchanges

scanx.trade, 19 SeptResults

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

Watch Items

Revenue growth is negative (-78.6%) on the latest reported period — check if this is one-off or a trend.
Cross-check against the company's latest quarterly filing / investor presentation before acting.

DalalBaazaar Thesis

🟡Business QualityAdequate9/20

🟢Financial HealthStrong13/20

🟡GrowthModest9.5/20

🟡ProfitabilityModerate9.4/15

🟢ValuationAttractive13/15

🔴RiskHigh4/10

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. 2 high-severity red flags sit above this conclusion and should be read first.

This thesis breaks if

✓EBITDA margin holds above -3%-1.1%
✗Free cash flow remains positive-₹6 Cr
✗Interest cover stays above 3x2.6x
✗ROCE stays above 8%4.5%