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Check Before You Invest : Longview Tea Company Ltd

BSE: 526568 NSE: ISIN: INE696E01019
  |   Sector:  Miscellaneous   |   Industry:  Trading

Snapshot

Q.1 Which industry/sub-sector does Longview Tea Company Ltd belong to?
Longview Tea Company Ltd belongs to the Miscellaneous sector, operating specifically within the Trading segment.
Q.2 Is Longview Tea Company Ltd a good quality company?
Longview Tea Company Ltd is a quality company, based on a 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 Longview Tea Company Ltd undervalued or overvalued?
Longview Tea Company Ltd appears Undervalued, as its key valuation ratios are lower than 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 - 4.86
Price to Book 0.24 0.50
Price to Sales 5.72 6.22
EV to EBITDA -27.56 4.86
Q.4 Is Longview Tea Company Ltd a good buy now?
Longview Tea Company 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 Longview Tea Company Ltd?
Longview Tea Company Ltd revenue growth is 56.4% for FY-2025, which is above its 5-year CAGR of 34.23%, indicating faster growth.

Q.2 Gross Profit margin of Longview Tea Company Ltd?
Longview Tea Company Ltd Gross profit margin which is the profit after deduction of direct costs, is 28% for FY-2025, which is in line with its 5-year median of 28%, indicating stable margins.

Q.3 Operating Profit Margin of Longview Tea Company Ltd?
Longview Tea Company Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is -16.85% for FY-2025, which is above its 5-year median of -21.51% indicating increasing margins.

Q.4 Net Profit Margin of Longview Tea Company Ltd?
Longview Tea Company Ltd Net Profit Margin is 17.47% for FY-2025, is in line with its 5-year median of 17.47%, indicating stable margins.
Current Level 5-year
Historic Median
Gross Profit Margin (%) 28 28
Operating Profit Margin (%) -16.85 -21.51
Net Profit Margin (%) 17.47 17.47

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Longview Tea Company Ltd?
Longview Tea Company Ltd Return on Asset is 1.75%, which is in line with its 5-year historical median of 1.75%, indicating stable asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Longview Tea Company Ltd?
Longview Tea Company Ltd Return on capital employed is 2.64% for FY-2025, which is in line with its 5-year historical median of 2.64%. The current ROCE is below its estimated weighted average cost of capital (WACC) of 14%, indicating value preservation.

Q.7 Return on Equity (ROE) of Longview Tea Company Ltd?
Longview Tea Company Ltd Return on equity is 1.78% for FY-2025, which is in line with its 5-year historical median of 1.78%, indicating the business is making similar use of its shareholders capital.

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

Q.8 Debt to Equity ratio of Longview Tea Company Ltd?
Longview Tea Company Ltd Debt-to-Equity ratio is 0.00, which is lower the industry average of 0.03, indicating lower debt levels in the industry.

Q.9 Debt to cash flow from operations of Longview Tea Company Ltd?
Longview Tea Company Ltd Debt to cash flow from operations is 0, which is at a healthy level.

Ownership & governance

D: Promoter shareholding and pledge status of Longview Tea Company Ltd?

Q.1 Promoter shareholding and pledge status of Longview Tea Company Ltd?
Promoters hold 44.37% of the Longview Tea Company Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Longview Tea Company Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Longview Tea Company Ltd vs industry peers?
Longview Tea Company Ltd revenue CAGR is 34.23%, compared to the industry median CAGR of 0%, indicating faster growth and gaining its market share.
Profit Metrics
Current Level 5-year
Industry Median
Revenue Growth (%) 56.4 -
Gross Profit Growth (%) -72.7 17.9
Operating Profit Growth (%) 0 16.4
Net Profit Growth (%) -79 17.3
Operating Efficiency
Current Level 5-year
Industry Median
Asset Turnover (x) 0.1 0.52
ROE (%) 1.78 2.05
ROCE (%) 2.64 3.6
Cash Conversion Cycle (days) - 46

Valuation & price assessment

Q.1 Stock return of Longview Tea Company Ltd over the last decade?
Over the last 9 year(s), the stock has delivered a CAGR of 10.9% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR
10.9% 4.1% -16% -56.5%
Q.2 Valuation ratios of Longview Tea Company Ltd vs historical?
The current P/E ratio of 0 is lower than its historical median of 4.86, 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 - 4.86 33.62
Price to Book 0.24 0.50 1.57
Price to Sales 5.72 6.22 2.21
EV to EBITDA -27.56 4.86 14.09

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