How has been the historical performance of James Warren Tea?

Revenue and Profitability Trends

James Warren Tea’s net sales demonstrated a moderate upward trend from ₹121.37 crores in March 2017 to ₹144.31 crores in March 2020, reflecting a gradual expansion in its top line. However, the fiscal year ending March 2019 shows a notable absence of reported sales, which may indicate a reporting anomaly or restructuring phase. Operating profit margins have been inconsistent, with the company recording negative operating margins in 2017 and 2018, before achieving a positive margin of 4.14% in 2020. This improvement is underscored by an operating profit (PBDIT) of ₹7.46 crores in 2020, a significant recovery from losses in prior years.

Profit before tax also followed a similar pattern, moving from a modest ₹2.05 crores in 2017 to a loss in 2018, then rebounding to ₹4.26 crores in 2020. Correspondingly, the profit after tax (PAT) improved from near breakeven in 2017 to a positive ₹3.01 crores in 2020, despite a dip in 2018. Earnings per share (EPS) mirrored this recovery, rising to ₹4.26 in 2020 from negative values in earlier years.

Cost Structure and Expenses

The company’s expenditure profile reveals significant employee costs, which increased from ₹78.83 crores in 2017 to ₹95.55 crores in 2020, indicating a rising wage bill possibly linked to operational scaling or inflationary pressures. Manufacturing expenses, reported only in 2017 and 2018, declined from ₹44.22 crores to ₹40.81 crores before being unreported in 2019 and 2020, suggesting a shift in cost categorisation or operational changes. Other expenses surged to ₹40.56 crores in 2020 from zero in earlier years, which may reflect new operational or administrative costs. The company maintained zero interest expenses throughout, indicating an absence of debt servicing costs.

Balance Sheet and Asset Management

James Warren Tea’s total assets contracted from ₹183.45 crores in 2017 to ₹138.59 crores in 2020, reflecting asset optimisation or disposals. Shareholders’ funds similarly declined from ₹146.44 crores to ₹89.30 crores over the same period, signalling a reduction in net equity. The company reported no long-term or short-term borrowings, maintaining a debt-free status, which supports financial stability. Capital work in progress increased from ₹5.43 crores in 2017 to ₹8.85 crores in 2020, indicating ongoing investments in fixed assets. Non-current investments decreased notably from ₹47.83 crores to ₹25.46 crores, while current investments also fell, suggesting portfolio adjustments or liquidity management.

Liquidity and Cash Flow

Cash and bank balances showed a marked increase to ₹16.87 crores in 2020 from ₹3.74 crores in 2017, enhancing liquidity. Operating cash flow improved significantly, with ₹14 crores generated in 2019 compared to negative cash flows in 2017. However, net cash inflows remained negative in 2019 and 2018, reflecting investing and financing outflows. The company’s working capital position remained positive, supporting operational needs.

Summary and Outlook

Overall, James Warren Tea has demonstrated a recovery in profitability and operational efficiency after a challenging period marked by losses and margin pressures. The company’s ability to maintain a debt-free balance sheet and improve cash reserves enhances its financial resilience. While revenue growth has been modest, the turnaround in operating and net profits signals improving business fundamentals. Investors should monitor the company’s continued progress in cost management and asset utilisation to assess sustainable growth prospects.

Limited Time Only! Subscribe for Rs. 12,999 and get 1 Year of MojoOne + an Additional Year Completely FREE. Don't miss out on this exclusive offer. Claim Your Free Year →