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Check Before You Invest : Bombay Burmah Trading Corporation Ltd

BSE: 501425 NSE: BBTC ISIN: INE050A01025
  |   Sector:  Automobiles   |   Industry:  Auto Ancillary

Snapshot

Q.1 Which industry/sub-sector does Bombay Burmah Trading Corporation Ltd belong to?
Bombay Burmah Trading Corporation Ltd belongs to the Automobiles sector, operating specifically within the Auto Ancillary segment.
Q.2 Is Bombay Burmah Trading Corporation Ltd a good quality company?
Bombay Burmah Trading Corporation Ltd is a weak quality company, based on a inconsistent multi-year financial track record.

This assessment is based on company’s performance on Revenue growth, ROCE, Equity and Assets, key margin ratios, cash conversion cycle, and debt to cash flow from operations and how it compares with its long term averages.

Q.3 Is Bombay Burmah Trading Corporation Ltd undervalued or overvalued?
Bombay Burmah Trading Corporation Ltd appears Fair, as its key valuation ratios are in line with their past averages.

Based on the industry it operates in, the relevant valuation ratios include one of the following, P/E, P/BV, P/Sales, EV/EBITDA or a combination of two or more.

Valuation Ratios Current 5-year
Historic Median
Price to Earnings 50.59 -
Price to Book 37.64 43.88
Price to Sales 36.54 38.59
EV to EBITDA 100.68 134.71
Q.4 Is Bombay Burmah Trading Corporation Ltd a good buy now?
Bombay Burmah Trading Corporation Ltd is a neutral opportunity now, based on stable price trend analysis suggesting prices may move sideways. However, you need to check its quality and valuation before making a decision

Performance Analysis

We have analysed the performance of the company on the following:

  • How has it performed on generating Profits?

    By checking its Revenue growth, Gross, Operating and Net Margins compared to its last 5-year median.

  • How efficiently has it utilized Capital?

    By checking its ROCE, ROA, ROE and its Cash Conversion Cycle.

  • How is it managing its Debt?

    By checking its Debt to Equity and Cash Flow from Operations.

A: What are the trends in revenue and profit margins?

Q.1 Revenue growth of Bombay Burmah Trading Corporation Ltd?
Bombay Burmah Trading Corporation Ltd revenue growth is 5.3% for FY-2025, which is in line with its 5-year CAGR of 5.12%, indicating stable growth.

Q.2 Gross Profit margin of Bombay Burmah Trading Corporation Ltd?
Bombay Burmah Trading Corporation Ltd Gross profit margin which is the profit after deduction of direct costs, is 44.3% for FY-2025, which is above its 5-year median of 5.7%, indicating increasing margins.

Q.3 Operating Profit Margin of Bombay Burmah Trading Corporation Ltd?
Bombay Burmah Trading Corporation Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is -14.41% for FY-2025, which is in line with its 5-year median of -14.41% indicating stable margins.

Q.4 Net Profit Margin of Bombay Burmah Trading Corporation Ltd?
Bombay Burmah Trading Corporation Ltd Net Profit Margin is 43.34% for FY-2025, is above its 5-year median of 0.78%, indicating increasing margins.
Current Level 5-year
Historic Median
Gross Profit Margin (%) 44.3 5.7
Operating Profit Margin (%) -14.41 -14.41
Net Profit Margin (%) 43.34 0.78

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Bombay Burmah Trading Corporation Ltd?
Bombay Burmah Trading Corporation Ltd Return on Asset is 19.01%, which is above its 5-year historical median of 0.18%, indicating improved asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Bombay Burmah Trading Corporation Ltd?
Bombay Burmah Trading Corporation Ltd Return on capital employed is 31.03% for FY-2025, which is above its 5-year historical median of 8.3%. The current ROCE is above its estimated weighted average cost of capital (WACC) of 13.5%, indicating value creation.

Q.7 Return on Equity (ROE) of Bombay Burmah Trading Corporation Ltd?
Bombay Burmah Trading Corporation Ltd Return on equity is 62.22% for FY-2025, which is above its 5-year historical median of 1.06%, indicating the business is making better use of its shareholders capital.

Q.8 Cash conversion cycle of Bombay Burmah Trading Corporation Ltd?
Bombay Burmah Trading Corporation Ltd Cash conversion cycle is 113 days, below its 5-year historical median of 128 days, indicating improved working capital management. However, you need to compare this with its peers in the industry.
Current Level 5-year
Historic Median
Asset Turnover (x) 0.45 0.23
ROE (%) 62.22 1.06
ROCE (%) 31.03 8.3
Cash Conversion Cycle 113 days 128 days

C: How much debt does the business have and is it at a sustainable level?

Q.9 Debt to Equity ratio of Bombay Burmah Trading Corporation Ltd?
Bombay Burmah Trading Corporation Ltd Debt-to-Equity ratio is 1.65, which is above the industry average of 0.40, indicating higher debt levels in the industry.

Q.10 Debt to cash flow from operations of Bombay Burmah Trading Corporation Ltd?
Bombay Burmah Trading Corporation Ltd Debt to cash flow from operations is -3.39, which is at a unhealthy level.

Ownership & governance

D: Promoter shareholding and pledge status of Bombay Burmah Trading Corporation Ltd?

Q.1 Promoter shareholding and pledge status of Bombay Burmah Trading Corporation Ltd?
Promoters hold 74.05% of the Bombay Burmah Trading Corporation Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Bombay Burmah Trading Corporation Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Bombay Burmah Trading Corporation Ltd vs industry peers?
Bombay Burmah Trading Corporation Ltd revenue CAGR is 5.12%, compared to the industry median CAGR of 11.89%, indicating slower growth and losing its market share.
Profit Metrics
Current Level 5-year
Industry Median
Revenue Growth (%) 5.3 11.9
Gross Profit Growth (%) 933.3 16.2
Operating Profit Growth (%) 0 14.7
Net Profit Growth (%) 0 20.1
Operating Efficiency
Current Level 5-year
Industry Median
Asset Turnover (x) 0.45 1.24
ROE (%) 62.22 11.65
ROCE (%) 31.03 13.5
Cash Conversion Cycle (days) 113.31 46

Valuation & price assessment

Q.1 Stock return of Bombay Burmah Trading Corporation Ltd over the last decade?
Over the last 9 year(s), the stock has delivered a CAGR of 14.1% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR
14.1% 4.9% 16.6% -22.8%
Q.2 Valuation ratios of Bombay Burmah Trading Corporation Ltd vs historical?
The current P/E ratio of 50.59 is higher than its historical median of , indicating that the stock is trading above its historical average valuation.
Q.3 How do the current valuation ratios compare with 5-year historical median and industry numbers?
Valuation Ratios Current 5-year
Historic Median
5-year
Industry Median
Price to Earnings 50.59 - 28.71
Price to Book 37.64 43.88 2.99
Price to Sales 36.54 38.59 1.35
EV to EBITDA 100.68 134.71 11.85

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