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JainMatrix Investments/ Equity Research/ Balmer Lawrie – Is Traveling Fast Now

By Punit Jain - Equity Research Analyst and Founder, JainMatrix Investments

  • Date: 17th Oct 2016; CMP: Rs 677

  • Industry: PSU, diversified; Small Cap with Mkt Cap 1,980 crores

  • Advice: BUY with a target price of Rs 1,057 by Mar 2019, a 56% upside

Overview:

Balmer Lawrie & Co is a diversified Indian PSU firm into Travel and Tourism, logistics, Industrial packaging, greases, lubricants and Leather chemicals. In each of these areas it occupies good niches. The FY16 revenues were Rs 3,229 cr. and profits 179 cr. The Revenues, EBITDA and Profits of BLC are up by 7%, 6.8% and 7.3% CAGR over 7 years. The balance sheet is strong and RoCE is over 21%. Investors have got a return of 34% CAGR over 8 years.

Why Buy Now:

  1. It has been restructuring and strengthening operations by exiting weak segments and undertaking investments in logistics, warehouses, distribution, manufacturing and lubricants. Cash with the firm will be deployed very productively over 2-3 years.

  2. The share price has fallen 7% from a recent high of Rs 748. This gives investors an opportunity to enter at lower prices.

  3. The reserves & cash on balance sheet are high (Rs 560/sh.), so BLC operations are available for Rs 117. Buy with a target price of Rs 1,057 by Mar 2019, a 56% upside from current price levels.

The rest of this report is available on JainMatrix Investments website.

JainMatrix Investments had reported a Buy on Balmer Lawrie in Nov-2013 at a market price of Rs 306. Since then, the stock is up 121% in 3 years. See link – Balmer Lawrie – A Steady Boat. We continue to be positive.

DISCLAIMER

This document has been prepared by JainMatrix Investments Bangalore (JM), and is meant for use by the recipient only as information and is not for circulation. This document is not to be reported or copied or made available to others without prior permission of JM. It should not be considered or taken as an offer to sell or a solicitation to buy or sell any security. The information contained in this report has been obtained from sources that are considered to be reliable. However, JM has not independently verified the accuracy or completeness of the same JM has no known financial interests in Balmer Lawrie & Co or any related firm. Neither JM nor any of its affiliates, its directors or its employees accepts any responsibility of whatsoever nature for the information, statements and opinion given, made available or expressed herein or for any omission therein. Recipients of this report should be aware that past performance is not necessarily a guide to future performance and value of investments can go down as well. The suitability or otherwise of any investments will depend upon the recipient’s particular circumstances and, in case of doubt, advice should be sought from your Investment Adviser. Punit Jain is certified and registered under SEBI (Research Analysts) Regulations, 2014. Any questions should be directed to the director of JainMatrix Investments at This email address is being protected from spambots. You need JavaScript enabled to view it.

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