Terai Tea Co Shows Positive Financial Performance in Q2 FY25, But Investors Should Consider Cash Flow and Non-Operating Income

Terai Tea Co, a microcap company in the tea/coffee industry, has recently declared its financial results for the quarter ending September 2024. The company has shown a very positive performance in this quarter, with a score of 24 out of 100, an improvement from 23 in the previous quarter.

According to the financials, Terai Tea Co has seen a significant growth in its net sales, which have increased by 125.33% year on year, reaching Rs 49.46 crore. This shows a very positive sales trend for the company. The profit after tax (PAT) for the quarter has also shown a remarkable growth of 339.3% compared to the average PAT of the previous four quarters, reaching Rs 9.05 crore. The operating profit (PBDIT) for the quarter is the highest in the last five quarters, indicating a positive trend in the near term.

However, the company’s operating cash flow for the year has been the lowest in the last three years, at Rs -8.67 crore. This shows a decline in the company’s cash revenues from business operations. Additionally, the non-operating income for the quarter is 98.36% of the profit before tax (PBT), which may not be a sustainable business model. The company’s income from non-business activities has also increased significantly, reaching Rs 8.38 crore, which may not be sustainable in the long run.

Overall, Terai Tea Co has shown a positive financial performance in the quarter ending September 2024. However, investors should carefully consider the company’s cash flow and non-operating income before making any investment decisions. MarketsMOJO has given a ‘Sell’ call for the company’s stock, and it is advisable to do thorough research and analysis before investing in Terai Tea Co.