Dhunseri Tea & Industries Ltd

Growth Ratio Summary

Growth Score : 9.20

The company exhibits strong growth in revenue, operating profit, earnings per share, and net income, but faces challenges in asset growth. High growth rates in key financial metrics suggest successful strategies and market positioning. However, negative asset growth indicates potential issues in reinvesting profits or managing existing assets. While the company is expanding its profitability, it needs to ensure that asset growth supports long-term sustainability. Growth in revenue and profit is a positive sign, but attention must be paid to the efficient expansion of the asset base.

Financial Ratio Summary

Financial Score : 2.40

The financial ratios present a mixed picture with significant weaknesses. Adjusted and cash earnings per share are negative, indicating losses. Book value per share is average, while dividend per share is low, and capital expenditures are also low. The company's financial performance is struggling, as reflected in the negative earnings per share. Although its book value is average, the low dividend and capital expenditure suggest limited investment in future growth. Improving earnings and strategic capital allocation are crucial for enhancing the overall financial health..

Profitability Ratio Summary

Profitability Score : 2.00

The profitability ratios are weak across the board. Negative gross profit, ROCE, ROE, ROA, operating margin, and net margin all indicate significant challenges in generating profit. This suggests that the company's core operations are not profitable and measures should be taken to reduce costs. With consistently negative profitability metrics, the company needs to reassess its cost structure and revenue streams to return to profitability.

Efficiency Ratio Summary

Efficiency Score : 6.00

The efficiency ratios present a mixed picture. The company demonstrates strong receivables management, with a high receivables turnover ratio and low receivable days. This indicates efficient collection of payments. However, the fixed asset and capital turnover ratios are low, suggesting less efficient utilization of assets. Inventory turnover and days sales in inventory are average. Efficient receivables management is a positive sign, but improvements in asset utilization could further enhance the company's overall efficiency.

Coverage Ratio Summary

Coverage Score : 2.00

The coverage ratios are weak, with both interest coverage and equity dividend coverage being low. This suggests that the company may face difficulties in meeting its interest obligations and providing adequate dividend coverage for equity holders. While the company has a low debt burden, its earnings are insufficient to comfortably cover interest payments. The lack of dividend coverage may also deter potential investors seeking regular income. Improving earnings is essential to enhance coverage ratios.

Solvency Ratio Summary

Solvency Score : 10.00

The company demonstrates a strong solvency position. Low debt and debt-to-equity ratios suggest that the company relies less on external borrowing and has a healthy equity base. A high equity ratio further supports this, indicating that a significant portion of the company's assets is financed by equity. This provides a buffer against financial distress. The weighted average calculation, emphasizing recent data, confirms that the company has maintained a conservative approach to debt management.

Liquidity Ratio Summary

Liquidity Score : 2.00

The company's liquidity position is weak. The current and quick ratios suggest that the company may struggle to meet its short-term obligations with its current assets. Low cash and operating cash flow ratios further highlight this concern. While maintaining a lean approach can be efficient, the company might face difficulties if unexpected expenses arise or if there is a downturn in revenue. According to the weighted average calculation, recent performance heavily influences this assessment. However, the consistent low ratios across the years indicate a persistent issue.