MoneyWorks4Me

Check Before You Invest : Bharat Bhushan Finance & Commodity Brokers Ltd

BSE: 511501 NSE: ISIN: INE900A01013
  |   Sector:  BFSI   |   Industry:  Finance - Investment

Snapshot

Q.1 Which industry/sub-sector does Bharat Bhushan Finance & Commodity Brokers Ltd belong to?
Bharat Bhushan Finance & Commodity Brokers Ltd belongs to the BFSI sector, operating specifically within the Finance - Investment segment.
Q.2 Is Bharat Bhushan Finance & Commodity Brokers Ltd a good quality company?
Bharat Bhushan Finance & Commodity Brokers Ltd is a quality company, based on a multi-year financial track record.

This assessment is based on the bank’s performance on Total Income growth, Pre-Provision Operating Profit, RoA, RoE, CAR, and Asset Quality, along with how these metrics compare with its long-term averages.

Q.3 Is Bharat Bhushan Finance & Commodity Brokers Ltd undervalued or overvalued?
Bharat Bhushan Finance & Commodity Brokers 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 0-year
Historic Median
Price to Earnings - 25.64
Price to Book - 3.70
Price to Sales - 3.07
EV to EBITDA - 24.76
Q.4 Is Bharat Bhushan Finance & Commodity Brokers Ltd a good buy now?
Bharat Bhushan Finance & Commodity Brokers Ltd is not a good buy now, based on weak price trend analysis suggesting prices may fall. 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 Total Income growth, NPM, PPOP, RoA and RoE compared to its last 5-year median.

  • How efficiently has it grown and managed operations?

    By checking its Total Asset growth.

  • How strong is its Capital position and Asset Quality?

    By checking its Capital Adequacy Ratio (CAR), GNPA and NNPA.

A: What are the trends in income and profitability?

Q.1 Total Income growth of Bharat Bhushan Finance & Commodity Brokers Ltd?
Bharat Bhushan Finance & Commodity Brokers Ltd Operating Income growth is % for FY-, which is in line with its --year CAGR of N/A%, indicating stable growth.

Q.2 Does its ROIC exceed its WACC?
Bharat Bhushan Finance & Commodity Brokers Ltd return on invested capital (ROIC) is % for FY-, is lower than its estimated weighted average cost of capital (WACC) of 14%, indicating value erosion.

B: Does the bank grow efficiently and manage its operating costs?

Q.3 Total Asset growth of Bharat Bhushan Finance & Commodity Brokers Ltd?
Bharat Bhushan Finance & Commodity Brokers Ltd Total Asset growth is 199.88% for FY-, which is above its 0-year CAGR of 45.89%, indicating faster growth.

Ownership & governance

D: Promoter shareholding and pledge status of Bharat Bhushan Finance & Commodity Brokers Ltd?

Q.1 Promoter shareholding and pledge status of Bharat Bhushan Finance & Commodity Brokers Ltd?
Promoters hold 64.06% of the Bharat Bhushan Finance & Commodity Brokers Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Bharat Bhushan Finance & Commodity Brokers Ltd performance compare with that of its Peers?

Q.1 AUM Growth of Bharat Bhushan Finance & Commodity Brokers Ltd vs Industry Peers?
Bharat Bhushan Finance & Commodity Brokers Ltd AUM CAGR is %, compared to the 0-year industry median CAGR of 9.58%, indicating slower growth and losing its market share.

Q.2 Profit metrics (NPM, PPOP, RoA) of Bharat Bhushan Finance & Commodity Brokers Ltd vs industry peers
Bharat Bhushan Finance & Commodity Brokers Ltd profit metrics are below the industry median level of -0.95%, indicating weaker profitability compared to peers.
Profit Metrics
Current Level 0-year
Industry Median
NPM (%) - 4.06
PPOP (%) - -7.71
RoA (%) - 0.8

Q.3 Operating efficiency of Bharat Bhushan Finance & Commodity Brokers Ltd vs industry peers?
Bharat Bhushan Finance & Commodity Brokers Ltd ROCE () is in line with the industry median of (); while the current ROE (-2.6) are below than the 5-year average Industry ROE (0.85). This shows that the business is positioned in the middle quartile of the industry.
Operating Efficiency
Current Level 0-year
Industry Median
NPM (%) - 4.06
PPOP (%) - -7.71
RoA (%) - 0.8
ROCE (%) - -
ROE (%) - 0.85

Valuation & price assessment

Q.1 Stock return of Bharat Bhushan Finance & Commodity Brokers Ltd over the last decade?
Over the last 9 years, the stock has delivered a CAGR of 12.5% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR
12.5% 9.9% 10.3% -18.1%
Q.2 How do the current valuation ratios compare with 5-year historical median and industry numbers?
Valuation Ratios Current 0-year
Historic Median
0-year
Industry Median
Price to Earnings - 25.64 -
Price to Book - 3.70 -
Price to Sales - 3.07 -
EV to EBITDA - 24.76 -
Q.3 Valuation ratios of Bharat Bhushan Finance & Commodity Brokers Ltd vs historical and industry averages?
The current Price-to-Book (P/B) ratio of 0 is lower than its historical median of 3.70, indicating that the stock is trading below its historical average valuation.

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