Bhansali Engineering Polymers - An Import Substitution Story!

(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.

(nil_71) #396

As I mentioned earlier, there is a decelerating trend in BEPL top and bottom line. BEPL saved the day on topline through import , and also suffered exchange loss

As @chandragupta mentioned, I fulled agree, you may not see, substantial top line growth in coming days, till that 37KTPA expansion happens.

(cool_gaurav) #397

I agree with you that write off Rs. 8 Crore debtors is a huge amount (around 8% of profit) & matter of concern and also debtors has increased in absolute amount. Just writing a line that all the actions has been taken against defaulter is not enough. I think something more is there, keep a watch.

(jainnitinp) #398

Just like those with BEPL in their portfolio have a vested interest, those planning to invest also have an interest in writing negative and bringing the price down to find a good entry point. Credit goes to the mgmt for being transparent about the write-off and exchange loss otherwise they could’ve just gotten away without anyone knowing why other expenses have gone up. IMO, although the stock had priced in a good result already, today’s selloff was more a knee jerk reaction and it has entered oversold territory.

Disclosure: invested

(Vinay Arya) #399

Whether the trend is decelerating or accelerating can clearly be found out by the capacity utilisation nos, which according to the analyst reports are now in the range of 70-75% for FY18, i.e a production of ~70k tonnes out of 100k capacity. With more capacity of 37k tonnes being available at end of FY19, there is a clear opportunity for slow ramp up of utilisation numbers. There is no need to speculate on that.

(Barbie) #400

Company has an edge in ABS Market, due to duopoly and could perform better by utilizing its capacity and expansion plans.
But the main issue i found is with integrity of promoter. Specially after this write off of Rs 8 Crore debtor in latest quarter.

Discl : Not invested yet, analyzing the company

(nil_71) #401

I have one question, why Cos is not holding quarterly call with investors ? For the last 3 qtrs, they are meeting all the analysts on earth. They are not sharing any presentation also

(skhanbir) #402

I think its a fair expectation from the management to share the interactions/discussion and QA with analysts.
This will answer all the questions.

I expect the management to share the QA after finishing all the sessions with analysts.

(Chandragupta) #403

Came across this primer on ABS Resin :

(Deep_Mehta) #404

Fire at Satnoor Plant

9bf7967b-f85b-412d-a2ec-655bb85e8d13.pdf (752.3 KB)

(Agarwala) #405

Fire death and serious injury in an industrial plant is not a good news for investors, especially when the production comes to a standstill. The management says one week of interruption, but that is without assessing the damage. Therefore we do not know the date of resumption of the operation in Satnoor plant, where SAN is produced. In the absence of production, SAN will be imported. With a weak rupee, the margins and the profits for the current quarter will be definitely impacted. The short term scenario is that the share price will be range bound with a downward pressure. It is upside that is going to be capped. So those, who are sitting on profits will book profit. This may prove to be a good opportunity for long term investors.
Disclosure: exited a small position on Monday @ 194, but plan to reenter at lower levels.

(S_Banerjee) #406

Fire and damage caused by fire is part of industrial hazards. The way management detailed it to exchange is clearly showing its efficient way of running business. Small disruption will occur in production,no doubt about it. But it will not affect company fundamentals. Opportunity for long term investors.
Disc : Sold nothing and Added more in 190 level on Monday. If it goes down more will add more.

(Sameer Wakude) #408


There is a discoure by the company that plant plans to resume operations w.e.f. 25-May. So that means almost 1 month of downtime. IMHO Apr-Jun quarterly results will be affected.

(Tarak) #409

The Q1 results of Bhansali Engineering would indeed be affected.
In the meantime company seems to have formed bottom at around 162 levels.From here upward journey should begin.Though the upside should be capped.

(Sameer Wakude) #412

Has the company resumed operations in its plant? No news on BSE updates till now. It was supposed to start on 25-May.

Disc - Invested.

(Avijit Mukherjee) #413

Hi, There is no news on their plant starting after fire although their was a disclosure in BSE that its going to start on 25 May … In the meantime the stock gets badly beaten down… Is this only happening because of the fire ? or the international oil price hikes playing a role in it ? Can anyone please throw some light on this … Thanks

DIsc - Invested

(skhanbir) #414

Update on plant commencing operations started and now in testing phase.
The announcement will happen in 2/3 days.

No shareholder has sold any share and there is no remote possibility.
Fundamentals are intact. There would be some(minor) impact on results due to Fire.

Golden opportunity to grab.

Disc: Invested

(harry4u9) #415

Update on plant commencing operations started and now in testing phase.
The announcement will happen in 2/3 days.

Source of this information?

(skhanbir) #416

Call with ND Misra by one of the MF exec.
Call and Info is correct to what ever I have mentioned.

(KoolSIM) #417

BEPL put under ASM framework from June 1, along with a bunch of other stocks. New rules means 5% circuit filters and 100% margin levied.