Bengal & Assam Company Limited

mpany Limited
24 September 2012 Key Data (as on 24 Sep’12)
BSE 533095 ISIN INE083K01017
Face Value Rs 10 Mkt Cap (Rs. mn) 2020
CMP: Rs. 233
30 day volume 4107 Current P/E 13.8
Industry: NBFC
BSE group/index: B/- 52 week high-low 253.85 – 170.00 Current P/BV 0.75
Equity Capital (Rs mn) 86.8 Net-worth (Rs mn) 2705.2

Promoters Company business

Hari Shankar Singhania Bengal & Assam Company Ltd. (BACL) invests in a diversified portfolio of quoted and
Raghupati Singhania unquoted securities of companies which are engaged in various businesses, including
Anshuman Singhania & other family the JK ‘East’ Group of companies. The company has subsidiaries, which operate in v-
members belts, cotton yarn and fabric, polymers and dairy products. It is an investment company
and registered as an NBFC with RBI.
Year of incorporation
30 January 1947 Hari Shankar Singhania, the promoter, is the chairman. He is also the chairman of JK
Lakshmi Cement Ltd., JK Paper Ltd., and JK Tyre & Industries Ltd.

Corporate office Peer analysis

Link House 3, Bahadur Shah Zafar Marg,
FY12, Bengal & Assam BF Investment Nahar Capital &
New Delhi - 110002 Rs million Company Ltd. Ltd. Financial Services
Total income 281.9 505.9 202.9
EBIDTA 266.1 484.4 184.8
Company website EBIDTA margin 94.4% 95.8% 91.1%
www.bengalassam.com
PAT 146.4 434.9 159.0
PAT margin 51.9% 86.0% 78.4%
EPS 16.87 11.55 9.5
Cash accruals 149.5 436.9 159.0
BV/share 311.6 164.1 267.9
Debt/EBIDTA (x) 6.4 - 0.5
Debt/Equity (x) 0.6 - 0.02
ROANW 5.5% 7.3% 3.6%
ROACE 6.7% 8.1% 4.1%
P/E 14.3 3.67 5.0
P/BV 0.75 0.26 0.17
Source: Moneycontrol, Company

Like some of its peers it is trading at a price to book value of below one and discounts its
earnings 14 times.

Write to us at:
equityresearch@outlookindia.com

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Initiative of the BSE Investors’ Protection Fund
 Bengal & Assam Company Limited
mpany Limited
Price Performance

80.0%
59%
60.0%

40.0%

20.0%

0.0%
3 YR
-20.0% -7%

Small Cap Bengal & Assam Company Ltd.

3 Yrs: 1 September 2009 to 31 August 2012

Listed on BSE on 17 August 2009

Public Shareholders >1%

No. of Shares Shares as % of Total
Sl. No. Name of the Shareholder
held (mn) No. of Shares
1 Life Insurance Corporation of India 0.27 3.2
2. Ashok Kumar Kinra 0.21 2.4
3. Edgefield Securities Ltd 0.20 2.3
4. Keswani Haresh 0.16 1.9
5. Ricky Ishwardas Kripalani 0.14 1.6
Total 0.99 11.4
Source: BSE

Change in Shareholding Pattern (%) Shareholding Pattern (%)

Year Promoters DII FII Others
Jun-12 69.8 4.6 - 25.6
Mar-12 69.8 4.6 0.1 25.5 Others Promoter
Dec-11 69.8 4.6 0.1 25.5 FII 26%
0% DII
Sep-11 69.8 4.6 0.1 25.5
DII FII
Mar-11 69.8 4.8 0.1 25.3 4% Promoter
70% Others
Mar-10 69.7 6.4 0.2 23.7
Mar-09 NA NA NA NA
Mar-08 NA NA NA NA
Mar-07 NA NA NA NA Source: BSE, as at 30 June 2012
Source: BSE
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Initiative of the BSE Investors’ Protection Fund

mpany Limited
Diversified investments across industries
Is exposed to capital market risk
Economic and industrial cycle
Any changes in regulations may materially affect
operations and growth prospects adversely
Paper industry is highly fragmented
Indian cement industry faces challenge of excess
capacity
Slowdown in economic cycle has a direct impact on the
automotive sector
Initiative of the BSE Investors’ Protection Fund
Bengal & Assam Company Limited
Key strengths
Although investments are concentrated in one business group, the
investments are diversified across industries and companies.
Key concerns
Any adverse financial impact on the operations/business of the investee
company and change in general economic scenario may impact the
revenues of BACL
The company is exposed to economic and business cycles, company
performance and market trends. . Of the Rs 2172.8 mn of quoted equity
shares at book, investments in JK group companies account for Rs 2058.4
mn (approx. 94%). Any adverse impact on the group companies will have
a direct impact on the company.
The activities of the company, an NBFC, are primarily governed by
Reserve Bank of India (RBI). Changes in policies, rules and regulations
may affect the operation and growth prospects.
Investment Overview
Most of the investments are in the JK “East’ group , which operate across
businesses: tyre, cement, paper, milk & milk products and agri seeds. The
company’s performance is linked to these sectors
th
In terms of paper production India ranks 15 in the world with more
than 700 organized and unorganized units and paper mills. The top five
producers account for 15 per cent of the total paper capacity in the
country.
Indian cement industry continues to face the challenge of excess capacity
build up which has resulted in low capacity utilization of about 75%.
Consequently, the prices are generally under pressure.
A slowdown in the economic cycle has a direct impact on the automotive
sector. Demand for cars and transportation along with better
connectivity are the drivers of industry.
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mpany Limited
Modern Cotton
Acorn
Yarn Spinners
Engineering Ltd.
Ltd.
Company was listed in 2008 pursuant to the
amalgamation of Ashim Investment Company Ltd. and
Netflier Finco Ltd and their respective subsidaries
BACL owns stakes in JK Tyres & Industries, JK Lakshmi
Cement Ltd., JK paper, JK Sugar etc
Fenner India is a manufacturter of belts, pulleys,
couplings, variable speed drives, clutches and gear
boxes
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Bengal & Assam Company Limited
Company Information (excluding investments)
Bengal & Assam
Company Ltd.
Fenner (India) LVP Foods Pvt. Panchmahal
Ltd. Ltd. Properties Ltd.
Southern BMF Divya Shree
Spinners & Investments Company Pvt.
Processors Ltd. Ltd. ltd.
BACL was originally incorporated under the name ‘Bengal & Assam
Investors Ltd.‘ as a Public Limited Company. The name was later changed
to “Bengal & Assam Company Limited”. The company was listed in 2009,
post the amalgamation of Ashim Investment Company Ltd. and Netflier
Finco Ltd. along with their wholly owned subsidiaries with BACL.
BACL earns income by way of dividend from investments (including from
its subsidiaries), interest and rental income.
The market value (as at 31 March 2012) of quoted investment is Rs 4.44
bn (including 20.92% stake in JK Tyres & Industries Ltd., 23.13% stake in
JK Lakshmi Cement Ltd., 20.72% stake in JK paper Ltd., 38.55% stake in JK
Agri Genetics Ltd., 38.6% stake in JK Sugar ltd. 45.1% stake in Umang
Dairies Ltd, formerly JK Dairy & Foods Ltd.)
The book value of unquoted investments amounts to Rs 1.88 bn
(including mutual funds Rs 0.32 bn, book value of investments in
subsidiaries Rs 1.05 bn, preference share in JK group companies Rs 0.47
bn).
The company’s subsidiaries include Fenner (India) Ltd and LVP Foods Pvt.
Ltd.
Fenner (India) Ltd. is a manufacturer of industrial & automotive V-belts,
oil seals and power transmission systems. It exports include V-belts,
auto-belts and oil seals. It exports to over 50 countries.
Automotive belts and oil seals are parts in almost all vehicle segments.
Belts are used in a variety of applications for driving radiator fans, water
pumps, alternators air conditioning compressor etc. Oil seals are used as
a sealing medium for oil/fluids in various automobile applications such as
engine, transmission, wheel, front fork, power steering etc.
The major brands of Fenner India include: Fenner, Powerflex, Ecodrive,
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 Bengal & Assam Company Limited
Pioneer, JK Pioneer, F&F, Top Drive etc.
mpany Limited
Fenner India has five manufacturing facilities viz Madurai, Nialakotai-
Dindugal, Chennai, and two facilities in Hyderabad.

Textile: Fenner India diversified into manufacture of cotton textile in

1992. Fenner India’s textiles division manufactures a wide variety of
Fenner India diversified into manufacture of cotton
hosiery yarn, warp yarn and sewing threads used in cotton knit and
textile in 1992
woven garments. The manufacturing facilities are in Karur and Salem.
The textile division also manufactures knit fabrics and woven fabrics.
Dairy: LVP Foods in collaboration with Umang Dairies Ltd. has a long
LVP Foods in collaboration with Umang Dairies Pvt. Ltd.
term contract with Mother Dairy Fruit and Vegetables Pvt. Ltd. to
to process and pack liquid milk in poly pouches
process and pack liquid milk in poly pouches.

Key financial indicators

Fall in profit is attributed to decline in dividend income
and increase in finance cost
BACL reported 18% fall in total income to Rs.281.9 mn. This is mainly
attributed to 38% decline in dividend income to Rs 164.6 mn. Other
income increased to Rs.48.2 mn v/s Rs.12.9 mn in FY11.
Finance cost increased to Rs. 104.1 mn from Rs.1.81 mn in FY11 on
account of larger borrowings to finance investments As a result profit
before tax declined to Rs.159 mn (Rs.303.8 mn in FY11).
PAT stood at Rs.146.4 mn v/s Rs.292.1 mn in FY11.

Quarterly results
1 2
Particulars (Rs in mn) Apr ‘12 to Jun ‘12 Apr ‘11 to Jun ‘11 % Change Jan ’12 to Mar ‘12 % Change
Income from operations 3.01 0.39 669% 6.27 -52%
Total income 4.20 1.52 176% 7.42 -43%
Total expenditure 0.32 0.32 0% 0.35 -9%
EBIDTA 3.88 1.20 223% 7.07 -45%
PAT 0.30 0.51 -41% 2.59 -88%
EPS 0.34 0.59 -42% 2.98 -89%
1
compared to corresponding quarter in the previous year
2
sequential comparison

Value per share Key ratios

40
Particulars (Rs in mn) FY12 33.64
30 27.68 EPS
Market value of quoted investments 4445.9
Book value of unquoted investments 1881.7 20
16.87
Current assets 131.0 10 Dividend per
2.5 4 4 share
Total (a) 6458.6 0
Total borrowings 2705.2 FY10 FY11 FY12
Other current liabilities 147.4 400.0 298.7 311.6
Total (b) 2852.6 243.8

Net (a-b) 3606.0 200.0

No of equity shares 8.68

-
Value per share 415.3 FY10 FY11 FY12
Book value/share

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 Bengal & Assam Company Limited
mpany Limited Profitability ratios Leverage ratios
8.00
15.0% 10.8% 11.9% 6.00 6.40
9.0% 9.7%
10.0% 5.5% 6.7% Debt to equity
4.00
5.0% 3.17
2.00 2.47 Debt to EBIDTA
0.0% 0.63
FY10 FY11 FY12 - 0.40 0.31
FY10 FY11 FY12
ROAE ROACE

Financials
P&L (Rs. mn) FY10 FY11 FY12 Balance Sheet (Rs. mn) FY10 FY11 FY12
Total income 304.9 342.8 281.9 Share Capital 86.8 86.8 86.8
EBITDA 292.3 325.1 266.1 Reserves & Surplus 2249.2 2506.6 2618.4
EBIDTA margin 95.9% 94.8% 94.4% Net worth 2336.0 2593.4 2705.2
Depreciation 3.1 3.1 3.1 Borrowings 926.2 803.2 1701.8
Deferred tax
EBIT 289.2 322.0 263.1 1.8 1.0 1.1
liability/(asset)
Interest 26.2 18.1 104.1 Total provisions 67.3 36.2 36.3
Current Liabilities
PBT 263.0 303.9 159.0 30.1 18.5 21.5
(excluding borrowing)
Other non-current
Tax 22.6 11.8 12.6
liabilities - 24.0 15.3
PAT 240.4 292.1 146.4 Total liabilities 3361.4 3476.3 4481.2
Pat margin 78.9% 85.2% 51.9% Net fixed assets 194.6 192.1 186.3
Non-current investments 2880.3 3067.8 4054.5
Valuation ratios FY10 FY11 FY12 Loans and Advances 277.8 139.7 109.5
P/E 6.5 7.2 11.9 Current Assets 8.6 76.8 131.0
P/BV 0.73 0.81 0.64 Total assets 3361.4 3476.3 4481.2

Cash Flow (Rs.mn) FY10 FY11 FY12

PBT 263.0 303.9 159.0
CF from Operation 182.1 312.4 195.4
CF from Investment (28.5) (152.7) (931.4)
CF from Financing (157.0) (162.6) 759.7
Inc/(dec) in Cash (3.5) (3.0) 23.7
Closing Balance 8.7 5.7 29.5

Disclaimer

The information contained herein is from publicly available data or other sources believed to be reliable, but we do not represent that it is accurate
or complete and it should not be relied on as such. Our company shall not be in any way responsible for any loss or damage that may arise to any
person from any inadvertent error in the information contained in this report. This document is provided for assistance only and is not intended to
be and must not alone be taken as the basis for any investment decision. The user assumes the entire risk of any use made of this information.
Each recipient of this document should make such investigation as it deems necessary to arrive at an independent evaluation which may affect
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expressed may not be suitable for all investors. This information is strictly confidential and is being furnished to you solely for your information.

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