BHANSALI ENGINEERING SHARE: TARGET ACHIEVED!!!

“The stock market is a device for transferring money from the impatient to the patient”-Warren Buffet. 

Amazing quote shared by a great investor which truly signifies the stock we are about to discuss today.  

Let’s do a root cause analysis related to Bhansali Engineering share and try to understand how did it achieve the target we had predicted. 

By the way, the share had zoomed till ₹ 222 which is target achievement of 21% in a span of 10 trading sessions. 

How did the business of Bhansali Engineering share grow for achieving the desired target? 

Bhansali Engineering (BEPL) has a tremendous client base which are diversified in different sectors such as automobiles, home appliances, kitchenware and electronic healthcare. 

The main advantage of the company is that it is debt free and can use its cashflow for generating more revenue through business expansion. 

The company did approve the Brown Field ABS expansion project at existing plants i.e., Abu Road (Rajasthan) & Satnoor (Madhya Pradesh). 

The main intention of the company is to enhance the overall ABS production capacity to 2,00,000 tonnes per annum with a capex of ₹ 500 Cr. 

For the financial year 2021-22, the company also declared an Interim dividend for its shareholder in the month of Oct 2021. 

Let’s check how did Bhansali Engineering share perform financially. 

QUARTERLY RESULTS:     

Figures in Rs. Crores 

Quarterly Results	Sep 2019	Dec 2019	Mar 2020	Jun 2020	Sep 2020	Dec 2020	Mar 2021	Jun 2021	Sep 2021
Sales	280	260	251	99	308	411	473	232	375
Expenses	260	236	239	103	262	227	254	131	211
Operating Profit	20	25	13	-3	46	184	219	101	164
OPM %	0.07	0.09	0.05	-0.03	0.15	0.45	0.46	0.43	0.44
Other Income	0	1	0	5	2	2	2	5	4
Interest	0	0	0	0	0	0	0	0	0
Depreciation	2	3	3	3	3	3	2	2	3
Profit before tax	17	23	10	-1	46	183	219	103	165
Tax %	-0.17	0.26	0.25	-0.07	0.22	0.26	0.25	0.25	0.25
Net Profit	20	17	8	-1	36	136	163	77	124
EPS in Rs	1.23	1.02	0.47	-0.08	2.14	8.21	9.85	4.66	7.45

For the quarter ended 30-09-2021, the company reported a sale of ₹ 375 Cr which is an increase of 18% from the sales registered in the year ago period. 

Expense has increased from the previous quarter and the sales number indicate that Bhansali Engineering share is using this expense for increasing the sales. 

In quarter ended 30-09-21, the net profit of Bhansali Engineering share has increased from its previous quarter which is a great symbol of growth. 

These were some of the highlights in the quarterly results. 

BALANCE SHEET: 

Reserves have increased exponentially and there is a great interest shown by the investors in Bhansali Engineering share. 

In the quarter ended 30-09-21, the company has maintained its debt free record which is a great indicator of strong growth in upcoming future. 

Figures in Rs. Crores 

Balance Sheet	Mar 2015	Mar 2016	Mar 2017	Mar 2018	Mar 2019	Mar 2020	Mar 2021	Sep 2021
Share Capital	17	17	17	17	17	17	17	17
Reserves	168	110	145	241	282	340	665	849
Borrowings	42	32	137	0	0	0	0	0
Other Liabilities	169	191	121	166	230	297	96	139
Total Liabilities	396	349	420	423	529	653	777	1005
Fixed Assets	122	82	93	107	144	150	141	137
CWIP	0	0	0	6	0	2	0	0
Investments	0	0	0	1	1	2	2	2
Other Assets	274	267	326	309	384	500	634	866
Total Assets	396	349	420	423	529	653	777	1005

  

SHARE HOLDING SYNOPSIS 

Share Holding	Sep 2019	Dec 2019	Mar 2020	Jun 2020	Sep 2020	Dec 2020	Mar 2021	Jun 2021	Sep 2021
Promoters	55	55	56.45	56.45	56.45	56.45	56.45	56.45	56.45
FIIs	2.41	1.76	1.1	0.71	0.43	0.9	0.95	2.55	1.88
DIIs	0.29	0.44	0.17	0.17	0.02	0.16	0.02	0.02	0.02
Public	42.3	42.8	42.28	42.67	43.1	42.48	42.58	40.98	41.65

Promoters have maintained their position in this stock with a whopping 56.45%. 

FIIs have reduced their stake in this company while retail investors are the buyers into this stock. 

Let’s figure out how the price action worked for Bhansali Engineering share in just 10 trading sessions. 

In the previous analysis, we did highlight the formation of the reverse head and shoulder pattern.   

Click here for previous analysis on Bhansali Engineering share. 

Once the share price broke the resistance line, a massive rally was seen which ultimately helped the Bhansali Engineering share to reach its all-time high. 

DISCLAIMER