Is Bhansali Engineering Polymers Limited’s (NSE:BEPL) CEO Pay Justified?

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The CEO of Bhansali Engineering Polymers Limited (NSE:BEPL) is Babulal Bhansali. This analysis aims first to contrast CEO compensation with other companies that have similar market capitalization. Then we’ll look at a snap shot of the business growth. And finally we will reflect on how common stockholders have fared in the last few years, as a secondary measure of performance. This method should give us information to assess how appropriately the company pays the CEO.

See our latest analysis for Bhansali Engineering Polymers

How Does Babulal Bhansali’s Compensation Compare With Similar Sized Companies?

According to our data, Bhansali Engineering Polymers Limited has a market capitalization of ₹13b, and pays its CEO total annual compensation worth ₹77m. (This number is for the twelve months until March 2018). While we always look at total compensation first, we note that the salary component is less, at ₹6.0m. As part of our analysis we looked at companies in the same jurisdiction, with market capitalizations of ₹7.0b to ₹28b. The median total CEO compensation was ₹16m.

It would therefore appear that Bhansali Engineering Polymers Limited pays Babulal Bhansali more than the median CEO remuneration at companies of a similar size, in the same market. However, this fact alone doesn’t mean the remuneration is too high. We can better assess whether the pay is overly generous by looking into the underlying business performance.

You can see a visual representation of the CEO compensation at Bhansali Engineering Polymers, below.

NSEI:BEPL CEO Compensation, May 13th 2019
NSEI:BEPL CEO Compensation, May 13th 2019

Is Bhansali Engineering Polymers Limited Growing?

Bhansali Engineering Polymers Limited has increased its earnings per share (EPS) by an average of 32% a year, over the last three years (using a line of best fit). It achieved revenue growth of 19% over the last year.

This demonstrates that the company has been improving recently. A good result. It’s also good to see decent revenue growth in the last year, suggesting the business is healthy and growing. Although we don’t have analyst forecasts, shareholders might want to examine this detailed historical graph of earnings, revenue and cash flow.

Has Bhansali Engineering Polymers Limited Been A Good Investment?

I think that the total shareholder return of 271%, over three years, would leave most Bhansali Engineering Polymers Limited shareholders smiling. As a result, some may believe the CEO should be paid more than is normal for companies of similar size.

In Summary…

We examined the amount Bhansali Engineering Polymers Limited pays its CEO, and compared it to the amount paid by similar sized companies. As discussed above, we discovered that the company pays more than the median of that group.

Importantly, though, the company has impressed with its earnings per share growth, over three years. In addition, shareholders have done well over the same time period. Considering this fine result for shareholders, we daresay the CEO compensation might be apt. So you may want to check if insiders are buying Bhansali Engineering Polymers shares with their own money (free access).

Important note: Bhansali Engineering Polymers may not be the best stock to buy. You might find something better in this list of interesting companies with high ROE and low debt.

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.