Brief Commentary On Bhansali Engineering Polymers Limited’s (NSE:BEPL) Fundamentals

Bhansali Engineering Polymers Limited (NSE:BEPL) is a stock with outstanding fundamental characteristics. When we build an investment case, we need to look at the stock with a holistic perspective. In the case of BEPL, it is a financially-healthy company with a a strong track record of performance, trading at a discount. Below, I’ve touched on some key aspects you should know on a high level. For those interested in understanding where the figures come from and want to see the analysis, take a look at the report on Bhansali Engineering Polymers here.

Flawless balance sheet and good value

BEPL delivered a satisfying double-digit returns of 39% in the most recent year Not surprisingly, BEPL outperformed its industry which returned 13%, giving us more conviction of the company’s capacity to drive bottom-line growth going forward. BEPL is financially robust, with ample cash on hand and short-term investments to meet upcoming liabilities. This implies that BEPL manages its cash and cost levels well, which is an important determinant of the company’s health. Looking at BEPL’s capital structure, the company has no debt on its balance sheet. It has only utilized funding from its equity capital to run the business, which is typically normal for a small-cap company. BEPL has plenty of financial flexibility, without debt obligations to meet in the short term, as well as the headroom to raise debt should it need to in the future.

NSEI:BEPL Income Statement, April 29th 2019
NSEI:BEPL Income Statement, April 29th 2019

BEPL’s share price is trading at below its true value, meaning that the market sentiment for the stock is currently bearish. This mispricing gives investors the opportunity to buy into the stock at a cheap price compared to the value they will be receiving, should analysts’ consensus forecast growth be correct. Compared to the rest of the chemicals industry, BEPL is also trading below its peers, relative to earnings generated. This bolsters the proposition that BEPL’s price is currently discounted.

NSEI:BEPL Price Estimation Relative to Market, April 29th 2019
NSEI:BEPL Price Estimation Relative to Market, April 29th 2019

Next Steps:

For Bhansali Engineering Polymers, I’ve compiled three relevant aspects you should further examine:

  1. Future Outlook: What are well-informed industry analysts predicting for BEPL’s future growth? Take a look at our free research report of analyst consensus for BEPL’s outlook.
  2. Dividend Income vs Capital Gains: Does BEPL return gains to shareholders through reinvesting in itself and growing earnings, or redistribute a decent portion of earnings as dividends? Our historical dividend yield visualization quickly tells you what your can expect from BEPL as an investment.
  3. Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of BEPL? Explore our interactive list of stocks with large potential to get an idea of what else is out there you may be missing!

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.