It was mentioned in this same thread many months ago that the management is trying to revoke the pledged shares but the shares are under arbitration. So there seems to be some technical issue in this, nothing more. But it is not clear what exactly is the issue.
Thanks everybody for providing inputs, particularly Madhavikkutti, who did a very detailed and logical analysis. My feeling is also that promoters have done the pledging (or they are continuing with it) to have finances for themselves rather than for the company. This is because there are no long term loans on the books of the company. If promoters are keeping the shares pledged in lieu of borrowed money for themselves, it is plausible that they have done that to buy companyâs stock. That is perfectly admissible, but in the interest of the common investors the promoters should come clean on this.
2 Likes
Please pardon my noob question: How come there is interest paid in amount of 2.5 cr on Q2 whereas the borrowing is zero? If it is for short term borrowing, isnât that too high anyways? And go for short term loans if one is looking for capacity expansion. Wonât long term be a good idea?
Also, âother liabilitiesâ on the balance sheet has not reduced for last 10 years and are quite high at 250cr+.
Can someone help understand this?
As far as shareholding goes, there has been a slight change in promotorâs holding. It was 55.xx% by March2017 and now it is 54.xx% and the number of shares pledges remains same.
Disclosure: invested and sold part of investment last month.
1 Like
In last quarter promoter have bought 13.9 lac shares less than 1 % increase. This calculation excludes approximately 3 % which was reclassified as public from promoter. Though this is positive, but not sure whether all the price increase is because of promoter buying only; looks like it is getting attention from other parties too. The results are due on 14th Jan, like last quarter it is quiet early and expect to be bumper one.
Discl: i am invested
1 Like
Third quarter results.
Lots of details about expansion.
Members please critically analyze and respond.
From the Q3 Press Release, one can understand as follows:
- Capex approval is revised down from Rs.300 crore to Rs.70 crore. The new capex plan is:
a. Capacity expansion to 100 KTPA ABS Compounding capacity at Abu Road by 31-Mar-2018 costing Rs.20 crores
b. Capacity expansion to 137 KTPA ABS Compounding capacity at Abu Road by 31-Dec-2018 costing Rs.30 crores
c. R & D Centre at Abu Road to be completed by 31-Dec-2018 costing Rs.20 crore.
Total Capex is Rs.70 crore. HRG & SAN for the above will be imported and no new capex for the same.
- Port based greenfield plant to be completed by 31-Mar-2021. It will include captive manufacturing of HRG & bulk SAN besides the finished product ABS. The entire 137 KTPA ABS capacity and the R & D Centre will be shifted to the greenfield project location later
Capacity & capex for the new project is not mentioned. Earlier this was part of the overall capex of Rs.300 crore for 200 KTPA new capacity. Does this mean it may now change and the company will announce revised capacity later? Does anyone have any views?
2 Likes
If consolidation is happening in the ABS industry, it augurs well for the manufacturers. Two recent news reports:
2 Likes
What MC article missed that in 2018-19 Q1, additional capacity of 20 KTPA will kick in
1 Like
Moneycontrol (same Analyst Anubhav Sahu) had estimated revenues of Rs. 1,089 cr and 1,532 cr for 2018E & 2019E respectively in their research report on 16-Oct-17 (http://www.moneycontrol.com/news/business/moneycontrol-research/bhansali-engineering-gains-from-an-improved-pricing-environment-2414191.html). Not sure, why the same got downward revised to Rs. 970 cr and 1,227 cr in the 16-Jan-18 report. Considering that the ABS demand and prices are trending upwards (as suggested by the latest report) and utilization of the capacity also is trending up, I donât see any real reason for the downward revision of the projected revenues.
Due to the cyclical nature, BEPLâs Q3 revenues and profits have been historically lesser as compared to Q2, however the recently announced Q3 results has bucked that trend hands-down. I find the above as highly positive.
Now that, additional 20KTPA capacity (80KTPA to 100KTPA) will kick in by 31-Mar-18, that itself should increase BEPL revenue by 25% during the period of Apr-18 to Mar-19. Even if we most conservatively assume that BEPL is just able to repeat its Q3â18 performance (EPS of Rs. 1.75) over each of the 4 Quarters of FYâ19, the EPS derived would be Rs. 7 (1.75*4). However, with increased capacity of 25%, the above EPS can be estimated to be as Rs. 8.75 (as against the 7 estimated by Moneycontrol for 2019E in its latest report).
1 Like
since crude oil is going up and crude derivatives are used as raw material, is it the reason that the share has gone down by almost 105 despite excellent results. can someone throw light on the same/
@atul1082 Are you discussing the BEPL story here? Looks like mistaken identity. The share is hovering around year high levels, didnât drop much from its highs and had given great Q3 results.
The company came out with restructured capex plan as discussed in the previous posts by @Chandragupta and @madhavikkutti - all in all auguring well for future. The growth story looks intact.
Being a product in demand, the company should be able to pass on any cost increase in RM due to crude oil fluctuations, though not sure of long term contracts restricting this price increase.
BEPL-15-01-2018-PL.pdf (595.3 KB)
Report that gives you some perspective on current capacity utilization.
1 Like
@nil_71 thanks for the report on BEPL . I have gone through few other reports and notes on moneycontrol etc on BEPL specifically & on other companies in general.All are posting a good pic of the future. I keep going thru many reports of icici sec/HDFC sec/PL/sharekhan/motilal and so many others.I would request if members could share as to how far these reports could be taken on board and which among these have proved to be close to the performance.
Dics:I am invested in BEPL and looking to invest further
What I have personally noticed is these reports tend to pop up a lot during bull market and no one prepares a report during bear markets. Almost all reports come out with a buy call no matter the price with a hefty price target justified. I would say take such reports with a pinch of salt!
1 Like
Company has once again revised its capex plans. Instead of backward integrating by building HRG and bulk SAN manufacturing capacity at the Santoor plant for 300 Cr, it will only build a smaller downstream compounding plant for 50 Cr at Aburoad plant thereby going asset light for next 3 years. It will import RM instead of making it until the larger greenfield plant is ready. This will impact EBITDA margins but 300 cr of capex in 2018 was a large and unrealistic plan given the cashflow. EBIDA margins are growing and stronger rupee will help in keeping cost of imported RM low. This will keep the company debt free. Expansion plan also look more realistic now that capex will be spread out over next 4 years instead of front loading it in 2018.
Two plant set up also is costly. Company has cited that as a reason for low productivity and costs. By not investing further at Santoor plant, it may even close that plant in future. Company has also preponed port based plant commissioning date from March 22 to March 21. March 22 was too far out in the future. This gives a better visibility for next 2-3 years.
7 Likes
From the attached report:
Keeping this in perspective, we would consider
FY 20 earnings of Rs 2 bn in deriving valuations of 14x (or whatever) and advice an
accumulate at these levels with a medium term price target of Rs 266 implying an
earnings multiple of 22x on FY20E earnings.
Valuations of 14x or whatever 
5 Likes
Nice catch. Analyst is saying 14x or whatever it takes to justify a buy recommendation.
2 Likes
@ Yogesh Whats your opinion on the report?âNice catchâ? Is it on the stock ?
No. It was about the valuation logic. May be the analyst forgot to delete that. I generally donât look at sell side analyst reports. They are generally overly optimistic. I feel these guys start with a price target and work backward to justify it.
Last 2 steps while making this report - assign a target price and then later put in the appropriate valuation multiple as per the target price. Deadlines to meet⌠must have slipped! 