BCL INDUSTRIES AND INFRASTRUCTURE

Sales triple in last five years

BCL Industries and Infrastructure Ltd, a Mittal group company, is one of the largest agro-based companies in North India. This vertically integrated company is engaged in the manufacture of edible oils, including soyabean oil, sunflower oil, cottonseed oil and rice bran oil, under the brand name ‘Homecook’. It also manufactures Vanaspati under the brand name ‘Do Khajoor’

BCL is also engaged in the grain-based distillery business. In fact, it is the only company, not only in India but also in the entire south Asian region, that has a forward and backward integrated distillery-ethanol plant. The company has a unique expertise in producing ENA ethanol from multiple crops. It is going from strength to strength and its future prospects are all the more exciting.

Consider:

• The company has been in expansion mode ever since its inception in 1976 when it was incorporated as Bhatinda Chemicals Ltd. In 1991-92, it set up a new solvent extraction plant of 150/200 tpd capacity and a Vanaspati plant of 25 tpd. After a year, it increased the production capacity to 15,000 tpd. In 2001-2002, this capacity was doubled to 30,000 tpd. As ‘Do Khajoor’ became more and more popular, the company’s topline as well as bottomline started going up.
• BCL has developed expertise in producing ENA ethanol from multiple crops. This allows it to reduce dependency on a single crop and avoid the vagaries of raw material price fluctuations. The company has already set up a plant at Bhatinda of 200 klpd capacity and is now setting up another plant nearby with the same capacity. At the same time, its subsidiary, Savak Sha Distillery, has also set up an ethanol plant with a capacity of 200 klpd. The plant has been set up with the help of internal accruals and without raising any debt. The subsidiary has also got an approval to set up another ethanol plant with a capacity of 100 klpd at the same premises. This plant is being set up at minimal capex due to the existing facilities. With this 100 klpd plant going into production by the end of fiscal 2023, the company’s total ethanol capacity will go up to 700 klpd – taking into account the 400 klpd capacity of the main plant and the 300 klpd capacity of the subsidiary. This will make BCL one of the largest producers of ethanol from grains in the private sector in India
• The company has emerged as one of the leading manufacturers of high-quality rice bran oil in the world. In 2007-08, it set up a deodorizing system to achieve an excellent quality of rice bran refined oil. Little wonder that the company received the BK Goenka SEA award for refined rice bran oil twice!
• Needless to say, the growing business of the company is well reflected in its financial growth. During the last six years, its sales turnover has expanded from Rs 642 crore in fiscal 2017 to Rs 1,988 crore in fiscal 2022, with operating profit advancing from Rs 37 crore to Rs 138 crore and the profit at net level inching up from Rs 10 crore to Rs 85 crore during this period. BCL’s financial position has been getting stronger and stronger by the day, with reserves at the end of March 2022 standing at Rs 261 crore against an equity capital of Rs 27 crore, that too after a 1:1 bonus issue in 1992. The company has been regularly paying dividends, the rate for the last year being 50 per cent.

Prospects for the company going ahead are all the more promising and this will be a very good addition to the portfolios of longterm investors.

CONSOLIDATED PERFORMANCE INDICATORS (Rs. in crore)

VISAKA INDUSTRIES

At forefront of building products

The second largest cement asbestos product manufacturer in India, Visaka Industries has multiple products — from cement sheets and fibre cement boards to hybrid solar roofs and fibre yarn. Since its inception in 1981, the company has remained at the forefront, developing sustainable products and meeting demands from domestic as well as international markets. The company has been growing steadily and its future prospects seem to be all the more promising.

Consider:

• The Hyderabad-based company employs a unique business model for its product segment. Its asbestos cement sheet (ACS) finds extensive usage in urban and semi-urban interiors while cement asbestos products like V-boards and panels largely address rural markets, allowing for adequate geographic de-risking. The company’s customers for V-panels and boards include the GMR group, Shapoorji Pallonji, Soma Enterprises, TCS, Gujarat Ambuja, the Eanadu group, Uranium Corporation of India and Larsen&Toubro. Its building products are marketed directly to retailers, eliminating the conventional company-distributor-retailer model and resulting in a better marketplace understanding. As a result, the company enjoys an enduring relationship with an extensive network of agents and retailers.
• Visaka has emerged as a credible, passionate and innovative solution provider. With its transformed product portfolio under V-next, the company enables contractors, builders, architects and applicators to emphasise sustainable architecture and build the future. The company’s V-next boards are designed to provide strength and stability as well as aesthetic solutions. V-next premium planks, a speciality grade product from Visaka, have become the choice of many consultants, engineers, builders and contractors and have been tested to survive even in extreme outdoor applications. In short, demand for the company’s products is constantly on the rise.
• The company also manufactures and is a global supplier of the wonder yarn – a human-made spool for various fabric applications across garments, apparels, furnishings, automotive fabrics and other technical textiles. The company is famed for roofing the largest Muratec Twin jet spun yarn technology facility with its world-class manufacturing set-up.
• With a view to addressing energy demands sustainability, the company has launched a path-breaking hybrid rooftop solar product called ATUM – the first of its kind in India. With its superior technological capabilities, ATUM is thermally efficient and generates 20% more revenue when compared to conventional solar panels. ATUM is the only renewable energy solution that is both a roof and solar panel designed to meet consistent energy demands that one can manage on his/her smartphone.
• With 12 manufacturing facilities, 13 marketing offices and a pan-India distribution channel of over 7,000 dealer outlets, Visaka has emerged as a sustainable business enterprise and a Green Pro Certified Organisation. Its excellent corporate governance and professional management have kept Visaka on a steady growth path.
• All these factors have quickened the pace of growth of the company on the financial front. During the last six years, the company’s sales turnover has expanded from Rs 967 crore in fiscal 2017 to Rs 1,416 crore, with the profit at net level taking a high jump from Rs 44.45 crore to Rs 118.53 crore during this period. The company’s financial position is very strong, with reserves at the end of March 2022 standing at Rs 715 crore – over 41 times its equity capital of Rs 17.28 crore. The company is deleveraging its balance sheet by reducing debt. The interest burden as a result has gone down from Rs 20 crore in fiscal 2019 to Rs 11.56 crore in fiscal 2022. and in the very near future Visaka will be a totally debtfree company.

This is a stock worth investing in, and discerning investors should include it in their portfolios.

PERFORMANCE INDICATORS (Rs. in crore)