BBTC - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 2.6
| Stock Code | BBTC | Market Cap | 11,713 Cr. | Current Price | 1,677 ₹ | High / Low | 2,225 ₹ |
| Stock P/E | 155 | Book Value | 31.2 ₹ | Dividend Yield | 1.01 % | ROCE | 28.0 % |
| ROE | 55.5 % | Face Value | 2.00 ₹ | DMA 50 | 1,823 ₹ | DMA 200 | 1,899 ₹ |
| Chg in FII Hold | 0.12 % | Chg in DII Hold | -0.01 % | PAT Qtr | -10.6 Cr. | PAT Prev Qtr | -12.2 Cr. |
| RSI | 34.7 | MACD | -43.7 | Volume | 34,982 | Avg Vol 1Wk | 32,805 |
| Low price | 1,521 ₹ | High price | 2,225 ₹ | PEG Ratio | 0.97 | Debt to equity | 1.21 |
| 52w Index | 22.2 % | Qtr Profit Var | 8.74 % | EPS | 21.4 ₹ | Industry PE | 50.0 |
💹 Financials: Bombay Burmah Trading Corporation (BBTC) shows strong return ratios on paper with ROE at 55.5% and ROCE at 28.0%, but these are skewed by accounting adjustments rather than consistent profitability. Debt-to-equity at 1.21 indicates high leverage, which adds financial risk. Quarterly PAT remains negative (-10.6 Cr.), though slightly improved from -12.2 Cr., highlighting weak earnings performance. EPS at 21.4 ₹ is modest relative to market cap.
📊 Valuation: The stock trades at a P/E of 155, far above the industry average of 50.0, suggesting extreme overvaluation. The P/B ratio is ~53.7 (1677/31.2), which is highly stretched. PEG ratio of 0.97 indicates valuations are not justified by growth. Dividend yield at 1.01% is modest, offering limited income return.
🏢 Business Model & Advantage: BBTC operates as a holding company with interests in plantations, healthcare, and investments, including a significant stake in Britannia Industries. Its competitive advantage lies in diversified holdings and legacy presence. However, profitability from core operations remains weak, and reliance on associate companies drives valuation.
📈 Overall Health: Financially leveraged with weak profitability and negative PAT, despite strong return ratios on paper. RSI at 34.7 suggests the stock is approaching oversold territory, while MACD at -43.7 indicates bearish momentum. Long-term fundamentals depend heavily on Britannia’s performance rather than standalone operations.
🎯 Entry Zone: Attractive entry closer to 1,500–1,550 ₹ range, near support levels. Current price of 1,677 ₹ is expensive relative to earnings. Long-term investors should be cautious, accumulating only at lower levels given high debt and extreme valuations.
Positive
- Strong ROE (55.5%) and ROCE (28.0%) on paper.
- Dividend yield of 1.01% provides modest income return.
- Strategic stake in Britannia Industries adds value.
- FII holdings increased slightly (+0.12%), reflecting marginal foreign investor confidence.
Limitation
- Extremely high P/E (155) compared to industry average (50.0).
- High P/B ratio (~53.7) suggests stretched valuation.
- Debt-to-equity ratio (1.21) indicates high leverage risk.
- Negative PAT highlights weak profitability.
Company Negative News
- Quarterly PAT remains negative (-10.6 Cr.), showing weak earnings.
- DII holdings decreased slightly (-0.01%), reflecting reduced domestic institutional support.
Company Positive News
- Quarterly PAT improved marginally from -12.2 Cr. to -10.6 Cr.
- FII holdings increased by 0.12%, showing marginal foreign investor confidence.
- Strong value derived from Britannia stake.
Industry
- Diversified holding companies often trade at premiums due to strategic stakes.
- Industry P/E at 50.0 indicates BBTC trades at a steep premium compared to peers.
Conclusion
BBTC remains a legacy holding company with strong value derived from Britannia, but weak standalone profitability, high leverage, and extreme valuations limit attractiveness. Entry is advisable near 1,500–1,550 ₹ for long-term investors, with cautious accumulation recommended given reliance on associate performance and stretched multiples.