Fundamental Analysis

BOMBAY BURMAH TRADING CORP. LTD. 

Ticker : 501425
BUY : Rs 1076.50
Target : Rs 1190

Bombay Burmah Trading Corporation is a diversified manufacturing and trading company. It owns plantations of tea, coffee, cardamom, cocoa, rubber and palm oil in different countries like India, Thailand, Indonesia and Tanzania. It also manufactures ‘Formica’ brand of laminates, along with precision springs, analytical and precision balances and asbestos cement. On a consolidated quarterly front, the company reported a growth in the net sales of 2.95 per cent to Rs 3,002.36 crore in Q3FY20 from Rs 2,916.41 crore in Q3FY19. Operating profit for Q3FY20 was reported at Rs 538.15 crore in Q3FY20, up by 12.35 per cent from Rs 479.01 crore in Q3FY19. Net profit was reported at Rs 248.75 crore in Q3FY20, up by 15.46 per cent from Rs 215.44 crore in the same quarter of the previous fiscal year. The company’s ROCE improved to 32.41 per cent in FY19 from 30.70 per cent in FY18. Owing to the encouraging quarterly performance and improving fundamentals, we recommend a BUY.