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INVESTMENT INSIGHTS

Check Before You Invest : James Warren Tea Ltd

BSE: 538564 NSE: ISIN: INE718P01017
  |   Sector:  Agriculture & Allied activities   |   Industry:  Tea/Coffee

Snapshot

Q.1 Which industry/sub-sector does James Warren Tea Ltd belong to?
James Warren Tea Ltd belongs to the Agriculture & Allied activities sector, operating specifically within the Tea/Coffee segment.
Q.2 Is James Warren Tea Ltd a good quality company?
James Warren Tea Ltd is a average quality company, based on a somewhat consistent multi-year financial track record.

This assessment is based on company’s performance on Revenue growth, ROCE, Equity and Assets, key margin ratios, cash conversion cycle, and debt to cash flow from operations and how it compares with its long term averages.

Q.3 Is James Warren Tea Ltd undervalued or overvalued?
James Warren Tea Ltd appears Fair, as its key valuation ratios are in line with their past averages.

Based on the industry it operates in, the relevant valuation ratios include one of the following, P/E, P/BV, P/Sales, EV/EBITDA or a combination of two or more.

Valuation Ratios Current 5-year
Historic Median
Price to Earnings 1.35 3.40
Price to Book 0.47 0.96
Price to Sales 0.9 0.84
EV to EBITDA 3.7 3.92
Q.4 Is James Warren Tea Ltd a good buy now?
James Warren Tea Ltd is not a good buy now, based on weak price trend analysis suggesting prices may fall. However, you need to check its quality and valuation before making a decision

Performance Analysis

We have analysed the performance of the company on the following:

  • How has it performed on generating Profits?

    By checking its Revenue growth, Gross, Operating and Net Margins compared to its last 5-year median.

  • How efficiently has it utilized Capital?

    By checking its ROCE, ROA, ROE and its Cash Conversion Cycle.

  • How is it managing its Debt?

    By checking its Debt to Equity and Cash Flow from Operations.

A: What are the trends in revenue and profit margins?

Q.1 Revenue growth of James Warren Tea Ltd?
James Warren Tea Ltd revenue growth is 42.1% for FY-2025, which is above its 5-year CAGR of 2.84%, indicating faster growth.

Q.2 Gross Profit margin of James Warren Tea Ltd?
James Warren Tea Ltd Gross profit margin which is the profit after deduction of direct costs, is 21.5% for FY-2025, which is above its 5-year median of 11%, indicating increasing margins.

Q.3 Operating Profit Margin of James Warren Tea Ltd?
James Warren Tea Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 18.4% for FY-2025, which is above its 5-year median of 6.23% indicating increasing margins.

Q.4 Net Profit Margin of James Warren Tea Ltd?
James Warren Tea Ltd Net Profit Margin is 61.09% for FY-2025, is above its 5-year median of 7.42%, indicating increasing margins.
Current Level 5-year
Historic Median
Gross Profit Margin (%) 21.5 11
Operating Profit Margin (%) 18.4 6.23
Net Profit Margin (%) 61.09 7.42

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of James Warren Tea Ltd?
James Warren Tea Ltd Return on Asset is 60.06%, which is above its 5-year historical median of 6.21%, indicating improved asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of James Warren Tea Ltd?
James Warren Tea Ltd Return on capital employed is 75.97% for FY-2025, which is above its 5-year historical median of 10.1%. The current ROCE is above its estimated weighted average cost of capital (WACC) of 14%, indicating value creation.

Q.7 Return on Equity (ROE) of James Warren Tea Ltd?
James Warren Tea Ltd Return on equity is 74.08% for FY-2025, which is above its 5-year historical median of 9.6%, indicating the business is making better use of its shareholders capital.

Q.8 Cash conversion cycle of James Warren Tea Ltd?
James Warren Tea Ltd Cash conversion cycle is -0 days, above its 5-year historical median of -11 days, indicating deteriorated working capital management. However, you need to compare this with its peers in the industry.
Current Level 5-year
Historic Median
Asset Turnover (x) 0.98 0.84
ROE (%) 74.08 9.6
ROCE (%) 75.97 10.1
Cash Conversion Cycle - -11 days

C: How much debt does the business have and is it at a sustainable level?

Q.9 Debt to Equity ratio of James Warren Tea Ltd?
James Warren Tea Ltd Debt-to-Equity ratio is 0.00, which is lower the industry average of 0.21, indicating lower debt levels in the industry.

Q.10 Debt to cash flow from operations of James Warren Tea Ltd?
James Warren Tea Ltd Debt to cash flow from operations is 0, which is at a healthy level.

Ownership & governance

D: Promoter shareholding and pledge status of James Warren Tea Ltd?

Q.1 Promoter shareholding and pledge status of James Warren Tea Ltd?
Promoters hold 68.61% of the James Warren Tea Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

E: How does James Warren Tea Ltd performance compare with that of its Peers?

Q.1 Revenue growth of James Warren Tea Ltd vs industry peers?
James Warren Tea Ltd revenue CAGR is 2.84%, compared to the industry median CAGR of 3.64%, indicating slower growth and losing its market share.
Profit Metrics
Current Level 5-year
Industry Median
Revenue Growth (%) 42.1 3.6
Gross Profit Growth (%) 800 14.9
Operating Profit Growth (%) 0 0.5
Net Profit Growth (%) 4,950 8.5
Operating Efficiency
Current Level 5-year
Industry Median
Asset Turnover (x) 0.98 0.68
ROE (%) 74.08 4.28
ROCE (%) 75.97 6.8
Cash Conversion Cycle (days) -0.04 46

Valuation & price assessment

Q.1 Stock return of James Warren Tea Ltd over the last decade?
Over the last 9 year(s), the stock has delivered a CAGR of 7.5% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR		 7.5% 13.7% 4.5% -17.5%
Q.2 Valuation ratios of James Warren Tea Ltd vs historical?
The current P/E ratio of 1.35 is lower than its historical median of 3.40, indicating that the stock is trading below its historical average valuation.
Q.3 How do the current valuation ratios compare with 5-year historical median and industry numbers?
Valuation Ratios Current 5-year
Historic Median		 5-year
Industry Median
Price to Earnings 1.35 3.40 21.84
Price to Book 0.47 0.96 0.99
Price to Sales 0.9 0.84 1.07
EV to EBITDA 3.7 3.92 14.06

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