Balmer Lawrie & Company Ltd, a central public-sector undertaking under the Ministry of Petroleum and Natural Gas, has been a significant player in India’s industrial sector since 1972. With diverse operations in Industrial Packaging, Greases & Lubricants, Chemicals, Logistics, and Travel Services, the company has established a strong market presence both domestically and internationally.
As we look towards the future, it’s crucial to understand the company’s current financial health and what lies ahead. In this article, we delve into a fundamental analysis of Balmer Lawrie, exploring its financial performance over the years and offering insights into why it might be a worthy addition to your investment portfolio.
Table of Contents
Let’s take a closer look at the balance sheet dashboard of the company and break down each component step by step to gain a comprehensive understanding.
Financial Performance Overview
Sales, Net Profit & Operating Profit (2018-2025)
Balmer Lawrie has shown a steady increase in sales from ₹1,722 crores in March 2018 to a projected ₹2,475.83 crores by March 2025. Despite some fluctuations, net profit and operating profit have seen recovery and growth, particularly from March 2022 onwards. The net profit is expected to rise from ₹123 crores in March 2022 to ₹216.34 crores by March 2025.
Operating Profit Margin (%)
The Operating Profit Margin (OPM) for Balmer Lawrie has witnessed a decline from 13.21% in March 2019 to a low of 7.85% in March 2022. However, projections indicate a recovery to 11.17% by March 2025. This suggests the company is taking strategic steps to improve its operational efficiency and profitability.
Earnings Per Share (EPS)
Earnings Per Share (EPS) is a critical indicator of a company’s profitability. Balmer Lawrie’s EPS dropped from ₹10.36 in March 2020 to ₹6.81 in March 2021 but has since shown a positive trend, reaching ₹12.68 by the projected March 2025. This growth reflects the company’s ability to generate higher earnings for its shareholders over time.
Return on Equity (ROE)
Return on Equity (ROE) is another vital metric for investors. Balmer Lawrie’s ROE dropped to 8.87% in March 2021 but is expected to recover to 14.53% by March 2025. This upward trend in ROE indicates a potentially stronger financial performance and better returns for equity investors.
Asset Distribution
As of March 2025, Balmer Lawrie’s assets are distributed across various segments, with a significant portion invested in fixed assets (₹584 crores), followed by other assets, investments, and Capital Work in Progress (CWIP). This distribution reflects the company’s focus on long-term asset investments to drive future growth.
Liability Distribution
Balmer Lawrie’s liabilities are mainly composed of reserves (₹1,256 crores), other liabilities, borrowings, and equity capital. The company’s strong reserves position indicates financial stability and a cushion against potential downturns.
Why Balmer Lawrie Could Be a Good Buy
Balmer Lawrie’s diversified business model, strong asset base, and recovery in key financial metrics make it an attractive investment opportunity. The company’s focus on improving operational efficiency and profitability is evident in the projected increase in OPM and ROE. Additionally, its strategic investments in infrastructure and capacity expansion position it well for future growth.
Furthermore, Balmer Lawrie’s steady sales growth and increasing EPS indicate a robust revenue generation capability, making it a potentially undervalued stock in the PSU segment. For investors looking for a stable, long-term investment in the industrial sector, Balmer Lawrie presents a compelling case.
Checkout the performance of the stock starting from 2018 to till date
The stock is currently trading at ₹275.50, it may be bought at current price with stoploss of ₹260, the stock has potential to reach ₹320-₹350 is near term.
Conclusion
Balmer Lawrie & Company Ltd’s strong financial recovery, diversified business portfolio, and promising growth projections make it a stock worth considering. As the company continues to improve its operational efficiency and expand its market presence, it offers significant potential for long-term investors. Balmer Lawrie stands out as an undervalued gem in the PSU sector, with a bright future ahead.
FAQs
What does Balmer Lawrie do?
How has Balmer Lawrie’s financial performance been?
Is Balmer Lawrie a good investment?
What are the growth projections for Balmer Lawrie?
What are the risks associated with investing in Balmer Lawrie?
What is Balmer Lawrie’s ROE trend?
What industries does Balmer Lawrie serve?
Check out In-depth Fundamental Analysis of RIL
Check out In-depth Fundamental Analysis of TCS
Check out In-depth Fundamental Analysis of INFOSYS
Check out In-depth Fundamental Analysis of Adani Ports
Check out In-depth Fundamental Analysis of UPL
Check out In-depth Fundamental Analysis of ASIANPAINTS
Check out In-depth Fundamental Analysis of Wipro
Check out In-depth Fundamental Analysis of L&T
Check out In-depth Fundamental Analysis of CUMMINSIND
