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Check Before You Invest : Bright Brothers Ltd

BSE: 526731 NSE: BRIGHTBROS ISIN: INE630D01010
  |   Sector:  Chemicals & Fertilizers   |   Industry:  Plastic Products

Snapshot

Q.1 Which industry/sub-sector does Bright Brothers Ltd belong to?
Bright Brothers Ltd belongs to the Chemicals & Fertilizers sector, operating specifically within the Plastic Products segment.
Q.2 Is Bright Brothers Ltd a good quality company?
Bright Brothers Ltd is a average quality company, based on a somewhat consistent 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 Bright Brothers Ltd undervalued or overvalued?
Bright Brothers Ltd appears Somewhat overvalued, as its key valuation ratios are higher than 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 17.82 3.07
Price to Book 1.64 1.33
Price to Sales 0.39 0.41
EV to EBITDA 5.88 7.62
Q.4 Is Bright Brothers Ltd a good buy now?
Bright Brothers 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 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 Bright Brothers Ltd?
Bright Brothers Ltd revenue growth is 34.3% for FY-2025, which is above its 5-year CAGR of 8.55%, indicating faster growth.

Q.2 Gross Profit margin of Bright Brothers Ltd?
Bright Brothers Ltd Gross profit margin which is the profit after deduction of direct costs, is 6.5% for FY-2025, which is above its 5-year median of 4.2%, indicating increasing margins.

Q.3 Operating Profit Margin of Bright Brothers Ltd?
Bright Brothers Ltd Operating Profit Margin which is the profit after deduction of all operating costs, is 8.61% for FY-2025, which is above its 5-year median of 5.67% indicating increasing margins.

Q.4 Net Profit Margin of Bright Brothers Ltd?
Bright Brothers Ltd Net Profit Margin is 2.63% for FY-2025, is in line with its 5-year median of 2.63%, indicating stable margins.
Current Level 5-year
Historic Median
Gross Profit Margin (%) 6.5 4.2
Operating Profit Margin (%) 8.61 5.67
Net Profit Margin (%) 2.63 2.63

B: Does the business utilize capital efficiently?

Q.5 Return on Asset of Bright Brothers Ltd?
Bright Brothers Ltd Return on Asset is 4.05%, which is in line with its 5-year historical median of 3.94%, indicating stable asset utilization efficiency.

Q.6 Return on capital employed (ROCE) of Bright Brothers Ltd?
Bright Brothers Ltd Return on capital employed is 19.34% for FY-2025, which is in line with its 5-year historical median of 19.34%. The current ROCE is above its estimated weighted average cost of capital (WACC) of 14%, indicating value creation.

Q.7 Return on Equity (ROE) of Bright Brothers Ltd?
Bright Brothers Ltd Return on equity is 11.71% for FY-2025, which is in line with its 5-year historical median of 11.71%, indicating the business is making similar use of its shareholders capital.

Q.8 Cash conversion cycle of Bright Brothers Ltd?
Bright Brothers Ltd Cash conversion cycle is 56 days, below its 5-year historical median of 81 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) 1.54 1.32
ROE (%) 11.71 11.71
ROCE (%) 19.34 19.34
Cash Conversion Cycle 56 days 81 days

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

Q.9 Debt to Equity ratio of Bright Brothers Ltd?
Bright Brothers Ltd Debt-to-Equity ratio is 0.42, which is above the industry average of 0.25, indicating higher debt levels in the industry.

Q.10 Debt to cash flow from operations of Bright Brothers Ltd?
Bright Brothers Ltd Debt to cash flow from operations is 3.68, which is at a unhealthy level.

Ownership & governance

D: Promoter shareholding and pledge status of Bright Brothers Ltd?

Q.1 Promoter shareholding and pledge status of Bright Brothers Ltd?
Promoters hold 54.54% of the Bright Brothers Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

E: How does Bright Brothers Ltd performance compare with that of its Peers?

Q.1 Revenue growth of Bright Brothers Ltd vs industry peers?
Bright Brothers Ltd revenue CAGR is 8.55%, compared to the industry median CAGR of 4.71%, indicating faster growth and gaining its market share.
Profit Metrics
Current Level 5-year
Industry Median
Revenue Growth (%) 34.3 4.7
Gross Profit Growth (%) 250 14.3
Operating Profit Growth (%) 154.6 10.1
Net Profit Growth (%) 0 18.7
Operating Efficiency
Current Level 5-year
Industry Median
Asset Turnover (x) 1.54 1.06
ROE (%) 11.71 5.91
ROCE (%) 19.34 8.75
Cash Conversion Cycle (days) 55.95 77

Valuation & price assessment

Q.1 Stock return of Bright Brothers Ltd over the last decade?
Over the last 9 year(s), the stock has delivered a CAGR of 18.6% based on the current price.
9Y 5Y 3Y 1Y
Share Price
CAGR
18.6% 26% 20.3% -18.6%
Q.2 Valuation ratios of Bright Brothers Ltd vs historical?
The current P/E ratio of 17.82 is higher than its historical median of 3.07, 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 17.82 3.07 22.05
Price to Book 1.64 1.33 1.89
Price to Sales 0.39 0.41 1.33
EV to EBITDA 5.88 7.62 10.86

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