1. At a Glance
Once the quiet plastics guy at the back of the class, Bhansali Engineering Polymers Ltd (BEPL) decided it was done being ignored. With a 25% ROCE, a bonus issue shower, and margins thicker than ABS plastic, BEPL became every smallcap investor’s flavour of the season… until reality slapped FY24.
2. Introduction with Hook
Imagine a multibagger that prints free cash, distributes 3 interim dividends, issues a bonus, and still trades at 15x P/E. Now imagine it struggling to grow sales over 5 years. BEPL is that paradox.
- EPS grew from ₹0.2 in FY15 to ₹7.2 in FY25
- Dividend payout hit a 106% high
- And yet, sales have barely budged: 5-year CAGR = 5%
Plastic dreams. Volatile margins. And a management that loves Toyo Engineering contracts. You in?
3. Business Model (WTF Do They Even Do?)
BEPL makes ABS, SAN, AES, and ASA resins. These plastics are the base materials used in everything from:
- Automotive interiors
- Home appliances
- Medical equipment
- Electronics, helmets, toys and pipes
They’re basically the “flour” of manufacturing. What ITC is to atta, BEPL is to polymer-based plastic compounding.
They cater to OEMs in auto, white goods and kitchenware. Their products are not glamorous—but essential.
4. Financials Overview
| Metric | FY25 | FY24 | FY23 |
|---|---|---|---|
| Revenue | ₹1,398 Cr | ₹1,222 Cr | ₹1,363 Cr |
| EBITDA | ₹214 Cr | ₹212 Cr | ₹177 Cr |
| Net Profit | ₹180 Cr | ₹179 Cr | ₹137 Cr |
| OPM (%) | 15% | 17% | 13% |
| EPS (₹) | 7.23 | 7.21 | 5.49 |
| Dividend Payout | 55% | 56% | 206% |
The company has survived raw material shocks and China dumps. Despite flat topline, its margins and cash flows scream maturity.
5. Valuation
Fair Value Range: ₹95 – ₹145
- At CMP ₹114, BEPL trades at ~15.7x trailing PE
- EV/EBITDA is under 8x
- Peer avg PE (Vinati, Atul, Deepak Nitrite) = 30x+
If BEPL executes its ABS expansion well and China doesn’t flood the market with cheap polymers again, the stock could see a 25–30% re-rating.
But if OPM slips below 12% (like FY23), this could also slide to ₹90.
6. What’s Cooking – News, Triggers, Drama
- ABS Brownfield Expansion: CAPEX contract with Toyo Engineering. Target: higher capacity, better grades.
- Environmental Clearance Received in Jan 2024.
- Bonus Shares: 1:1 issued in July 2023.
- MD re-appointed till 2029. Boardroom stability? Or Bhansali Family Dynasty Season 3?
- High dividend payouts and 3 interim dividends = Promoter love.
Watch out for:
- Real execution of expansion
- Raw material price movements (styrene, acrylonitrile)
- Dumping by China
7. Balance Sheet
| Metric | FY25 |
|---|---|
| Equity Capital | ₹25 Cr |
| Reserves | ₹977 Cr |
| Borrowings | NIL |
| Total Assets | ₹1,104 Cr |
| Fixed Assets | ₹137 Cr |
| Cash & Investments | ₹300+ Cr (Estimated) |
Key Points:
- Debt-free. Not “low debt” — zero.
- Net worth: ₹1,002 Cr
- ROCE = 25%, ROE = 19%
- Balance sheet = clean, lean, and generating obscene free cash
8. Cash Flow – Sab Number Game Hai
| Year | CFO | CFI | CFF | Net Cash Flow |
|---|---|---|---|---|
| FY25 | ₹109 Cr | ₹235 Cr | -₹100 Cr | ₹244 Cr |
| FY24 | ₹230 Cr | ₹45 Cr | -₹324 Cr | -₹49 Cr |
| FY23 | ₹140 Cr | -₹15 Cr | -₹50 Cr | ₹75 Cr |
Observations:
- FY25 saw strong investing cash inflow (likely due to maturity of FDs/investments).
- Consistent dividend pay-out, even if it strains CFF
- FY22–25 average FCF: ₹150–170 Cr annually
9. Ratios – Sexy or Stressy?
| Ratio | FY25 |
|---|---|
| ROE | 19% |
| ROCE | 25% |
| OPM | 15% |
| Current Ratio | >2.5x |
| Inventory Days | 44 |
| Debtor Days | 67 |
| Cash Conversion Cycle | 89 Days |
Verdict: The return ratios are sexy. The CCC is manageable. OPM bouncing between 7% to 25% = drama guaranteed.
10. P&L Breakdown – Show Me the Money
| Metric | FY25 | FY24 |
|---|---|---|
| Sales | ₹1,398 Cr | ₹1,222 Cr |
| Gross Profit | ₹215 Cr | ₹212 Cr |
| Other Income | ₹38 Cr | ₹40 Cr |
| Net Profit | ₹180 Cr | ₹179 Cr |
- Other income contributes ~20% of PAT
- Business is low-growth, high-cash now
- EPS has stabilised post-pandemic
- Expect flattish growth unless ABS expansion triggers a demand wave
11. Peer Comparison
| Company | CMP | P/E | ROCE | Div Yield | Market Cap |
|---|---|---|---|---|---|
| Pidilite | ₹2,992 | 73x | 30% | 0.7% | ₹1.5L Cr |
| Deepak Nitrite | ₹1,960 | 38x | 17% | 0.38% | ₹26.7k Cr |
| Vinati | ₹1,999 | 50x | 21% | 0.35% | ₹20.7k Cr |
| Bhansali | ₹114 | 15.7x | 25% | 3.5% | ₹2,828 Cr |
Conclusion: Lowest PE. Highest div yield. Debt-free. But also the least growth visibility among peers.
12. Miscellaneous – Shareholding, Promoters
| Stakeholders | Q1 FY26 |
|---|---|
| Promoters | 57.47% |
| FIIs | 1.43% |
| DIIs | 0.13% |
| Public | 40.96% |
| No. of Shareholders | 1.2 lakh+ |
- No major pledges
- Increasing public shareholding
- Promoters issuing bonus = confidence signal?
13. EduInvesting Verdict™
Bhansali Engineering is the “dividend uncle” of specialty chemicals. Doesn’t chase crazy topline. Doesn’t over-leverage. Doesn’t dilute equity (except bonus). Just compounds quietly and gives out generous dividends.
But it’s not your next 5x multibagger unless:
- The ABS expansion sees a demand boom
- Global resin prices don’t crash
- Auto demand in India sustains
If you’re looking for aggressive growth, look elsewhere.
If you want a stable, cash-printing polymer giant with conservative management, welcome to Club Bhansali.
Metadata
– Written by EduInvesting Research | 18 July 2025
– Tags: Specialty Chemicals, ABS Resins, Debt-Free, Smallcap Plastics, Bhansali
