Bombay Burmah Trading Corporation Ltd. (BBTC) - Stock Research & Analysis
CMP: 1766.55
Introduction
Founded in 1863, Bombay Burmah Trading Corporation Limited (BBTC) is a flagship company of the Wadia Group. Initially established for the teak business, BBTC has evolved into a diversified conglomerate with interests in food, plantations, auto components, healthcare, and investments. This article presents a comprehensive analysis of BBTC, covering its fundamentals and technical outlook.
Business Overview
BBTC operates across multiple business segments:
1. Food - Bakery & Dairy Products (96% Revenue in Q1 FY25)
The company holds a majority stake (~50%) in Britannia Industries Ltd (Britannia), a household name in India.
Britannia’s brands include Good Day, Tiger, NutriChoice, and Milk Bikis, contributing significantly to BBTC’s revenues.
2. Investments (2% Revenue in Q1 FY25)
The company holds substantial stakes in listed and unlisted entities, including:
The Bombay Dyeing & Manufacturing Co. Ltd (~45%)
National Peroxide Ltd (24%)
Britannia Industries Ltd (50%)
The market value of investments stands at ~₹58,500 Cr (FY24).
3. Auto Electrical Components (Electromags)
Manufactures switches, solenoids, sensors, and plastic molded parts.
Serves the passenger vehicle (PV), commercial vehicle (CV), and two-wheeler (2W) segments.
4. Tea Plantations
Operates 3 tea estates in Tamil Nadu and one in Tanzania.
The Oothu Tea Estate produces ~1 million kg of organic tea annually.
Average sale price of BBTC tea is ₹25/kg higher than South Indian market rates.
5. Healthcare
Manufactures dental products including alloys, orthodontic supplies, and dental implants.
Production unit located in Uttarakhand.
6. Divestment & Debt Reduction
Sold coffee business for ₹291 Cr in Feb 2023.
Debt reduced from ₹5,800 Cr (FY22) to ₹2,100 Cr (FY24).
Financial Performance
Revenue & Profitability
Strong revenue contribution from Britannia Industries.
Exceptional losses due to Go Airlines insolvency (~₹1,865 Cr booked in FY23).
Improving profitability with debt reduction and asset divestments.
Key Metrics
| Metric | FY24 | FY22 |
|---|---|---|
| Tea Production (Lakh KG) | 42.28 | 41.72 |
| Sales Volume (Lakh KG) | 40.11 | 44.16 |
| Avg Sale Price (₹/KG) | 142.92 | 142.88 |
Technical Analysis
Stock Price Trends
Recent Performance: BBTC’s stock has shown strong volatility due to its investment portfolio.
Key Support & Resistance Levels: Stock is trading near support level
Support: ₹1610
Resistance: ₹1920
50-Day Moving Average: Indicates short-term bullish sentiment.
200-Day Moving Average: Shows long-term support and uptrend possibility.
Indicators
Relative Strength Index (RSI): Currently at ~45, indicating neutral momentum.
MACD: Showing bullish crossover, signaling potential upward movement.
Volume Analysis: Increasing trading volumes suggest growing investor interest.
Future Outlook & Strategy
Growth Initiatives
Tea Business Expansion:
Adoption of biofertilizers to reduce costs.
Retail expansion to improve margins.
Electromags (Auto Components):
Focus on solenoids, switches, and electronic assemblies.
Exploring opportunities in EV components.
Investment Strategy:
Potential monetization of non-core assets to unlock value.
Further reduction of debt to improve financial stability.
Conclusion
BBTC remains a compelling stock due to its strong holdings in Britannia and other Wadia Group companies. The company’s efforts in debt reduction and business streamlining position it well for long-term growth. While risks from Go Airlines’ insolvency persist, its diverse portfolio and strategic initiatives offer potential for value appreciation.
Investment Perspective:
Short-term: Volatility expected; suitable for high-risk investors.
Long-term: Strong fundamentals with potential for steady growth.
Disclaimer:
The information provided on this blog is for educational and informational purposes only and should not be considered as investment advice or a recommendation to buy, sell, or hold any securities. The author is not a SEBI-registered investment advisor or analyst. Readers should conduct their own research and consult with a SEBI-registered financial advisor before making any investment decisions. The blog and its author are not responsible for any financial losses incurred as a result of information provided herein.
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