Bhansali Engineering Polymers - An Import Substitution Story!

(utsav_garg) #375

it has been raised by few people but I could not find anybody having any substantial answer to it, or maybe I missed out.
Could anybody please clarify that why promoters kept on purchasing shares from the open markets but didn’t reduce their pledge? Is it part of some strategy?

(Chandragupta) #376

It was mentioned in this same thread long ago that the promoters would very much like to remove the pledge but there is some legacy issue. It is not clear what exactly is the issue. Please see this:

(utsav_garg) #377

yeah that is what I do not understand. What exactly one means by “legacy issue”. Sorry I am kinda new to investment field so I might not be aware.

(parthibansubramanian) #379

what is stopping other big players in specialty chemical to set up an ABS manufacturing plant?..

there is a clear demand, market expected to grow approx. 15% but there are only 2 players in India,…

can anyone help me to understand.

thank you.

(manmohit) #380

BEPL in thier annual report has stated that there are significatnt entry barriers in this business. they have cited an example that LG india buys ABS from India or import it, even though LG chemicals is one of the biggest manufacturer of ABS in world

(nil_71) #381

Expecting BEPL to end topline between 990-1000 crs and OP between 160-165 crs. this year, 2017-18. Need to see. Anything better than this, good bonus.

(parthibansubramanian) #382

If LG-Chem is the biggest manufacturer in the world, there is no barrier to entry for LG-Chem to enter ABS manufacturing in India.

As per the information available online, BEPL is investing 1000 Crores for 200,000MTPA. until last year BEPL has a capacity of about 51000MTPA. so rough calculation comes to 200Cr for 50MTPA. This is not a huge capital for chemical companies in India.

in online i see SABIC and other Japnese and Korean companies offering to license their manufacturing process. so I don’t see there is again a barrier to entry…

something does not add up to the current ABS market in India.

(nil_71) #383

Pledge has been released fully. Check BSE site for the letter from Allahabad bank. Good news.

(vipin111) #384

Very good news for not only release of 5 crores of pledged shares which were almost 30% of equity but also personal guaranty, land and plant machinery hypothecated to Bank released.

(parthibansubramanian) #385

Is there a website, where one can see the price trend of ABS?


(madhavikkutti) #387

Communication in respect of implementation of ABS capacity expansion plan of the company from 80 KTPA to 100 KTPA at its Abu Road Unit:

Also, the company has informed that the Q4 results will be announced on 13-Apr

(hamed) #388

The circuit is revised from 5% to 10%

(madhavikkutti) #389

Hem Securities is bullish on Bhansali Engineering Polymers and has recommended buy rating on the stock with a target price of Rs 255 in its research report dated April 10, 2018:

(sairaghav) #390

Standalone & Consolidated results for Q4 and the full year are out. Net profit of 99.80 crores on revenue of 1204.55 crores, zero short-term debt appear good, however increase in trade receivables from 136 to 185 crores is of concern

Current P/E is close to 35 which is fair for a 30% growing company, but upside seems limited in my view. Operating efficiency of the expanded Abu Road plant will be of interest for immediate margin expansion.

Disclosure: Hold, 8% of portfolio.

(jainnitinp) #391

don’t just look at the absolute amount of receivables…the days sales outstanding have gone down 10% from 70 to 63…which means the company is collecting it’s receivables much faster than before…
otherwise also, the result is outstanding!
FY18 revenue growth 51%
pat growth 185%
ebitda [email protected] 15% (compared to 9% in fy17 and 6% in fy16)
pat [email protected] 9% (compared to 5% in fy17 and 3% in fy16)
debt to equity down to almost zero after repayment of 217cr of debt

disclosure: invested

(hemtan100) #392

Debtors write-off of 8 odd cr has sullied what could have been a phenomenal quarter.

(Krupesh Desai) #393




Assumption: All sales are considered credit sales for calculating receivables days

The performance has improved on every front be it margins, cash conversion, solvency … The only problem is the run-up in the share price and hence definitely not a fresh investment opportunity for a long-term investor. However there still seems some upside especially with Abu expansion advanced by one year. Q1 FY19 results would give a better picture on the future prospects.

Also if we ignore the one time 8 cr write off from Q4 FY 18 results, the EPS cmes to 6.43 valuing it at 32 P/E( fairly priced currently - although I would be comfortable with a 35 P/E for this firm especially with the auto sector booming and industry duopoly and considering Bhansali being the better of two)

Disclosure: invested from 50 levels

(nil_71) #394

BEPL - this 8 crs writeoff is puzzling still. In case you supply to Tier-1 Vendors and with Auto industry booming , why there is writeoff ? Is there something behind the smock ?

BEPL- going forward margin will be 12-14 % as it has to import RM and process it …

You may not get the explosive growth as base effect also kicks in…

All these are my analysis…

Disc Invested . PF% less than 1 now from earlier 7 %

(Chandragupta) #395

Purchase of stock-in-trade, almost absent till last year, is Rs.102 crores. This has produced 15-20 % of the revenue (material cost of in-house production is Rs.590 crores). This points strong demand, which the company is unable to meet from its own capacity. So it has sourced finished products from outside. While this is a positive, it also means that when the new capacity comes up, in-house production will replace these purchases. To that extent, new capacity will not contribute to topline growth. Part of the future topline growth has already come in this year. Margins should still improve though.

This is an item that should be watched.