BEPL Analysis ( Bhansali Engineers Polymer Limited)

BEPL Stock Analysis by IZ Team

The Company deals with only one business segment viz. ABS and SAN polymers. During the Fiscal 2017-18, the Gross Sales of goods manufactured by Company amounted to 1204.55 Crores as against  704.08 Crores during last fiscal registering a growth of 71.08%. Moreover, the total Comprehensive Income/Profit After Tax (PAT) amounted to  99.42 Crores in the F.Y. 2017-18 as against 35.07 Crores during last fiscal witnessing an impressive growth of around 183.49%.

The company’s 85% of the business comes from the Automobile sector.

    Opportunities for the BEPL:

    So far as opportunities are concerned, it is an established fact that the consumption of ABS in India is voluminously larger than the combined output of the domestic manufacturers viz. BEPL and Styrolution; hence the scope is humungous due to present supply-demand mismatch.

    Risk in the business:

    The typical nature of ABS business in India is exposed to the risk of Foreign exchange fluctuations as the key raw materials i.e. Styrene and Acrylonitrile monomers are import dependent since there is no indigenous producer for these monomers. The only raw material available is Butadiene monomer but it constitutes only 15%.

    ABS= Made from(Styrene+Acrylonitirile+Butadiene).

    FUTURE PLANS/EXPANSION:

    A) Expansion from 80 KTPA to 137 KTPA:

    a) In the text of Board’s Report of fiscal 2017, we had highlighted the expansion program to ramp up the ABS capacity to 137 KTPA by 31.12.2018. This program is being implemented in two phases i.e 80 KTPA to 100 KTPA by 31.03.2018 and thereafter from 100 KTPA to 137 KTPA by 31.12.2018. The company has already communicated to BSE/NSE vide letter dtd. 4th April 2018 that the ABS capacity expansion plan of the company from 80 KTPA to 100 KTPA at its Abu Road unit has been successfully implemented within the envisaged cost and time frame, i.e. Rs. 20 crores and 31st March 2018 respectively.

    b) Furthermore, concerted efforts are being directed to expand ABS compounding capacity to 137 KTPA within the envisaged time and cost schedule i.e. Rs. 30 crores and 31st December 2018 respectively.

    c) The R&D Centre at Abu road unit being set up at an estimated cost of Rs. 20 Crores will be operational by 30th September 2018.

    B) Port-Based Greenfield Project of 200 KTPA capacity:

    As was covered in the text of Board Report of fiscal 2017 dealing with the subject of future expansion, we are pleased to inform that after in-depth evaluation of alternative ports in Gujarat, Pipavav port has been selected as a location to set up the proposed port based green-field project of 200 KTPA capacity. In this connection, two alternative land parcels have been identified at Pipavav port and due diligence in respect of the first choice of land parcel is being presently carried out and hopefully will be completed by 15th May, 2018. This land parcel is available for disposal by a scheduled private bank. The other alternative land parcel is available with Govt. of Gujarat. The first land parcel is located within 3.3 kms. from the APM Terminal’s liquid jetty and the other land parcel referred to herein above is located at 6.5 kms. from the APM Terminal’s liquid jetty.

    Company my lose further value since no support seen in the stock. First support was 126. Continuous fall from 126 inspite of copany having good ratios and financials.

      It is a very good investment stock. A lot of expansion plan in the coming years. Last to last quarter was mired by fire in one of their plant and last quarter one-time Forex loss has happened. The stock price has come down considerably in comparison of the quality.

      Disclaimer: I am invested in BEPL.

        wait . crude oil may turn upward after opec/trump discussions..neither Putin or USA are happy with the current drop .. However BEPL is a buy on dips..