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In this edition, we have reviewed KSB Ltd. and Bhansali Engineering Polymers. We suggest our reader-investors to HOLD in Bhansali Engineering Polymers and EXIT in KSB Ltd.

We had recommended KSB Pumps in Volume 33, Issue No. 6, dated Feb 19 – Mar 4, 2018, under the ‘Special Report’ segment. The stock was trading at Rs 812 then and was recommended because it demonstrated healthy financials, offered promising returns on account of favourable monsoon and because of the thrust provided by Budget 2018. 

KSB is not only a major manufacturer of pumps and industrial valves, but also provides a wide range of services in engineering and IT. The company has sales and marketing set-ups, manufacturing facilities and service operations across several continents. The major operational segments include pumps, valves and others such as manufacturing of castings. KSB provides products and services catering to building services, process engineering applications, waste water, mining and energy applications. The company provides solutions for areas of automation and drive technology. 

On the financial front, the net sales for Q2FY19 has climbed 40 per cent to Rs 280 crore on a YoY basis from Rs 200 crore. The PBDT has also jumped 33 per cent YoY in Q2FY19 and came in at Rs 34.3 crore from Rs 25.8 crore. The PAT for Q2FY19 stood at Rs 16.1 crore as against Rs 11.61 crore in Q2FY18. 

On the annual front, the net sales were up by 17 per cent in FY18 to Rs 969.23 crore from Rs 827.02 core in FY17. The PBDT stood 11 per cent higher at Rs 135.55 crore in FY18 from Rs 122.37 crore in FY17. The PAT reached Rs 67.71 crore, up by 10 per cent from Rs 61.76 crore in fy17. 

Since our recommendation in a year the stock price has fallen around 18 per cent, hence we recommend an EXIT. 

We had recommended Bhansali Engineering Polymers in Volume 33, Issue No. 23, dated Oct 15 – 28, 2018, under the “Cover Story”. The stock was trading at Rs 130.50 then and was recommended because capacity expansion was kept on hold as also the increasing consumption of ABS and the strong financial performance. 

Bhansali Engineering Polymers Limited is a petrochemical company. The company is engaged in the manufacture of acrylonitrile butadiene styrene (ABS) resins and styrene acrylonitrile (SAN) resins. The company’s ABS resins are used as a raw material for companies dealing in automobiles, home appliances, telecommunications, luggage, bus body and various other applications. 

On the financial front, the net sales were up by 25 per cent as it came in at Rs 323.40 crore in the third quarter of fiscal year 2019 as against Rs 257.93 crore in the same quarter of the previous year. 

The PBDT stood at Rs 16.88 crore in Q3FY19 as against Rs 46.62 crore, a drop of 64 per cent YoY. Also, the PAT has fallen by 66 per cent YoY in Q3FY19 to Rs 9.97 crore from Rs 29.06 crore. 

On the annual front, the net sales for fiscal year 2018 came in at Rs 1058 crore from Rs 704 crore in the previous fiscal portraying a jump of 50 per cent. 

The PAT has soared 187 per cent in FY18 to Rs 99.64 crore from Rs 34.77 crore in FY17. 

Since our recommendation, the share price has fallen 50.72 per cent. However, the company has been reporting decent numbers. We would thus recommend a HOLD to our investorreaders for now and wait for a better time to gain from it. 

(Closing price as of Feb 12, 2019) 

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