Bhansali Engineering Polymers Ltd. share price target

Bhansali Engineering Polymers (BEPL) reported lower topline growth due to lower realisations (driven by lower crude prices). Revenues slipped 19.6% YoY and 7.0% QoQ to Rs 2601m. Gross margin per kg improved from Rs 28.9 in Q3FY19 to Rs 33.4 in Q3FY20. Styrene prices corrected from USD 1050/ton in...

Revenues slipped by 20.1% YoY and 10.8% QoQ, Adj. EBITDA by 48.3% YoY and 31.5% QoQ and PBT by 46.4% YoY and 29.7% QoQ to Rs 2,795mn/Rs199mn/Rs 198mn. Volumes stood at ~15,000 down marginally by 3.2% QoQ and 14.2% YoY. PAT however grew by 20.1% YoY due to utilisation of deferred tax asset. Styrene which accounts for 53% of RM costs suddenly corrected from USD 1050 during August to USD 900 per ton by end of quarter thus resulting in inventory losses. Dumping of natural grade ABS in domestic market is leading to continued pressure on realisations. Slowdown in auto is impacting specialty grade sales. With these...

We believe that A) Margins are likely to stay normalized as no major increase in RM prices is expected, B) The underlying challenge is not in selling volumes but selling at the desired level of profitability, C) Auto demand continues to stay muted and is likely to remain so for a couple more quarters, D) 20% volume growth can be sustained for the next 3 years from current capacity. Going ahead we expect per kg EBITDA spreads to improve to Rs 16.2 in FY20E and to Rs 17.8 in FY21E (compared to previous assumptions of Rs 15.2 and Rs 16.7) as all high cost inventory has been utilized. But as we have revised our volume assumptions...

BEPL reported its Q4 results. Revenue growth was above estimates (Rs 3,497m v/s PLe of Rs 3,209m), but PAT was way below expectations (Rs 29m v/s PLe of Rs 140m) due to major fall in gross margins (GRM). Revenues grew 15.9% YoY and 8.1% to Rs 3,497m. Volumes were up 7.1% YoY and 3.6% QoQ to 17,100 MTPA. GRMs plunged 19 percentage points YoY and 490 bps QoQ to 9.9% due to combined effect of lower sales of specialty grade due to slowdown in auto demand (specialty ABS sales) as well as high cost inventory....

BEPL reported its Q4 results. Revenue growth was above estimates (Rs 3,497m v/s PLe of Rs 3,209m), but PAT was way below expectations (Rs 29m v/s PLe of Rs 140m) due to major fall in gross margins (GRM). Revenues grew 15.9% YoY and 8.1% to Rs 3,497m. Volumes were up 7.1% YoY and 3.6% QoQ to 17,100 MTPA. GRMs plunged 19 percentage points YoY and 490 bps QoQ to 9.9% due to combined effect of lower sales of specialty grade due to slowdown in auto demand (specialty ABS sales) as well as high cost inventory....

Net revenues grew 25.4% YoY while dipped sequentially by 7.6% to Rs 3,234mn. The company sold 16,500 MTPA (up 3.1% YoY but 5.7% lower QoQ) at an average realisation of Rs 150/kg (up 5.6% YoY, down 11.6% QoQ). Due to high cost inventory in-hand, the gross margins dived to 14.8% lower by 14.2 percentage points YoY and 5.6 percentage points QoQ which led to contraction in EBITDA margins by 11.5 percentage points YoY and 2.6 percentage points QoQ to 5.2%. EBITDA decreased by 60.9% YoY and 38.5% QoQ to Rs 169mn. There was a forex gain of ~Rs 12mn in this quarter....

Net revenues grew 25.4% YoY while dipped sequentially by 7.6% to Rs 3,234mn. The company sold 16,500 MTPA (up 3.1% YoY but 5.7% lower QoQ) at an average realisation of Rs 150/kg (up 5.6% YoY, down 11.6% QoQ). Due to high cost inventory in-hand, the gross margins dived to 14.8% lower by 14.2 percentage points YoY and 5.6 percentage points QoQ which led to contraction in EBITDA margins by 11.5 percentage points YoY and 2.6 percentage points QoQ to 5.2%. EBITDA decreased by 60.9% YoY and 38.5% QoQ to Rs 169mn. There was a forex gain of ~Rs 12mn in this quarter....

Bhansali Engineering Polymers (BEPL) is a leading name in the petrochemical sector in India. BEPL is a vertically integrated petrochemical company that is into manufacturing of ABS (Acrylonitrile Butadiene Styrene) -- a raw material used extensively across industries...