Bhansali Engineering Polymers - An Import Substitution Story!

(Ram Arvin) #418

Is it good or bad for the stock?

(venkat457) #419

Generally stocks go to under ASM when exchanges want to put more surveillance to prevent volatility and price manipulations so I feel it may give negative impression at the moment. I just come to this understanding by reading some article so may be I am wrong. Experienced people may suggest the detailed impact of this action. The below link is old but explains what is ASM.

(bharat19) #420

I have following Queries regarding the business. I have analysed the company from March 2008 to March 2017.
Q1. The net fixed assets of the company were around 200 Cr in 2008 and reduced continuously every year and reduced to 90 Cr assets in 2017. Why it is so.
Q2. The net revenues of Company increased from 257 Cr to 626 Cr (10% CAGR) while the Net Fixed Assets declined from 197 Cr to 93 Cr (CAGR -8%) , Revenues get more than doubled while assets get halved in last 10 years. So how is it possible that Company is now generating more than Double revenues from Half the Assets.
Q3. Companies Cumulative Capex in last 10 years is Negative (-62Cr), So, what is the Capacity utilization of both the Plants of the Company. Also what is the life cycle of the Storage Tanks and other manufacturing Facilities. What is so special that company does not require Capex. All through these years between 2008-2016 , the Capex is negative.
Q4 .What is the reason behind the Company’s Tax Percentage variance in following Years. Tax paid by company in March 2009 is 45% , 15% Tax in March 2010 , Negative (-400%) Tax in March 2012 , 47% Tax in March 2014 , 28% Tax in March 2016. Why these Tax percentage are not normal.
Q5. The Operating Profit margins are also not consistent. Between March 2012 to March 2016 they are around 3-4% now suddenly rose to 10% in 2017. What are the reasons for higher realizations and how long these margins can sustain. What OPM margins can we expect in coming years. How good the pricing power of the Company.
Q6. Net debt on Companies books was 32 Cr in March 2016 and Nil Debt in March 2017. Now even we can assume that company paid debt in March month of 2017 and therefore has some interest liabilities But how come company paid 10 Cr as finance cost(that is 31% of interest Rate) [interest = 3.65 Cr + Finance & Bank Charges = 6.14 Cr.].
Q8. Is there any renumeration policy of the Company or Company will always pay 11% of profits (Maximum as per Companies Act) as Renumerations to KMP. Is that the reason for huge increment in KMP Renumerations this year due to high profits.
Q9. Bhansali Nippon A& L Private Limited is a joint venture company. How does this company helps to BEPL. What role does it play. As per the AR 2017 , the joint venture company contributes only 12 Lakh as revenues and has 80 lakh Expenses. The BEPL’s shares of Fixed Asset in Joint Venture Company is just 12 Lakh. So why BEPL pays 4,26 Cr of amount to the Joint Venture Company (3 Cr Rent + 1.26 Cr Royalty)

(hemtan100) #421

Fire breakout at Satnoor plant: 29 Apr
BEPL reported on exchanges: 30 Apr
Estimated time to recommence operations: 1 week
On 15th May, company announced 25th may is the recommencement date for production.
Eventually on 1st June, BEPL recommenced production on 1st June.

(jainnitinp) #422

Can someone who is experienced here elaborate more on ASM and how it has impacted other stocks in the past? Given the way midcaps are correcting every week, a 5% filter on BEPL might not be bad actually…

(skhanbir) #423

Is there any news of auditors resigning? Few stocks fell due to auditors resigned.
Azad and Co is an auditor for BHEL.
I couldn’t find anywhere in net regarding auditors resigning.
If anyone has this information, it would be helpful.
I sincerely hope auditors have not resigned.
Disc: Invested.

(rajsuccess) #424

B. L. Dasharda & Associates are the auditors of BEPL

(skhanbir) #425

Sorry its for BEPL.
Auditors for BEPL are Azad Jain and Co.
Please check the annual report

We hereby declare that the Statutory Auditors of the Company, M/S Azad Jain & Co., Chartered Accountants ( F. R. No. 006251C), have issued the Audit Report with Unmodified Opinion

Yours faithfully,

(jainnitinp) #426

Audtiors for BEPL have NOT resigned.

(jainnitinp) #428

Promoters are not selling. Recently the company secretary D N Mishra purchased about 13,200 shares.

(jainnitinp) #430

(skhanbir) #434

Looks like the market has sensed the results.
LC before the results.

(skhanbir) #436

Revenue lesser yoy/qoq.
Proflt lesser yoy/qoq
135 kpta expansion put on hold.
Aims at 75% capacity utilization.
EPS of 1.01

(topdog) #437

The following has happened to the company in Q1

  1. Sales have declined sharply from Q4 18
  2. profit and allied returns have all declined
    3)n The company has put on hold immediate brownfield expansion
  3. the company talks of achieving 75% capacity utilisation

A)the company has not clarified whether sales loss was due to the fire.
b) It is unclear whether sales have crashed due to reduction in demand
c) Why has the company cancelled expansion plans
d) Are there pricing issues due to cheap imports from China

Can someone call the company. I am abroad and currently unable to reach the company.
I am not interested in the talk about Greenfield but need information a -c

(utsav_garg) #438

could anybody shed some more light on the Greenfield project which company mentioned in its latest statement released to the public?

(atul1082) #439

As per my info, green field project was dropped long back and they had proposed brown field expansion which now has been put on hold as per the latest news

(jainnitinp) #440

If the results are viewed in the backdrop of the fire where production was down for approx 5 weeks (35% of the time of a quarter), they are not bad.

  1. Net of GST (last year there was no GST in Q1), sales have declined only 10% yoy and PAT is still flat i.e no decline there.
  2. EBITDA and PAT margins have gone up yoy.
  3. Due to the loan repayment in Mar '18 to Allahabad Bank, and the subsequent release of pledged shares, interest cost has come down to 1/3rd of Q4 FY18.

Need more clarification though on the hold up for capacity expansion from 100 to 137 ktpa. Have written to the company seeking clarification.
All said and done, do not think the fundamentals of the company have gone bad. One fire incident does not a bad company make!
Besides, share purchases by the mgmt (Jayesh Bhansali and DN Mishra, company secretary) in Feb and May 2018 were reassuring.

(kush_gangar) #441

Ambit - Q1’19 result update.pdf (144.7 KB)

(yudiagg) #442

I am in total agreement with the report that it is a one off decline due to fire incident. The demand from cars and other white goods , for its products, continues to robust.
I think it is a golden opportunity to accumulate.

Disc: invested and plan to add more to take advantage of decline

(Agarwala) #443

I have a slightly skeptical view about next few quarters of the company. I am looking at the broader picture as below.

Initially company wanted to increase the capacity of both Satnoor plant and Abu Road plant. Plan to increase HRG capacity at Satnoor was dropped first, while the capacity of polymer plant of Abu Road was increased from 80 to 100. This created the need for importing HRG. The cost of importing HRG is very high that was further fueled by rupee depreciation. Fire at Satnoor plant may be related to efforts at maximizing production of HRG at Satnoor. This is however purely speculative.

Now company has dropped its plan to further increased polymer capacity at Abu Road plant (100 to 137). This is because importing HRG for increase ABS polymer capacity at Abu Road is not economical. HRG is to be produced in house for the sake of economics. The company therefore took a rational decision of dropping the plan of increasing capacity at Abu Road plant.

With increase crude prices and weak rupee, the raw material costs of the company may remain high, while the topline will stagnate. In all probability the company will remain profitable, but the growth will occur only after the production starts at the new greenfield plant. That is 2 to 3 years from now. The ABS scenario may change in future. Investment in company at this point will be totally speculative.
Disclosure - Not invested and not thinking of investing during this FY.