Bhansali Engineering Polymers Limited Stock Analysis

Strong profitability retention with Q3FY26 PAT of ₹41.97 crore yielding 13.9% net margin despite revenue decline, demonstrating pricing power and cost management / Consistent dividend track record with third interim dividend of ₹1 per share declared, totaling ₹3 per share (300%) for FY26 YTD, reflecting strong cash generation / Healthy balance sheet with negligible finance costs of ₹4.97 lakh in Q3FY26, indicating minimal debt burden and financial flexibility / Sequential margin improvement with Q3FY26 PAT margin of 13.9% versus 12.3% in Q2FY26, showing operational efficiency gains despite lower volumes / Brownfield ABS expansion project progressing on schedule with all critical equipment purchase orders released, targeting 33% capacity increase from 75,000 TPA to 100,000 TPA by September 2026

Significant revenue contraction with Q3FY26 standalone revenue of ₹301.39 crore down 13% YoY from ₹345.84 crore, indicating demand headwinds in specialty thermoplastics segment / Nine-month revenue decline of 11.2% to ₹934.40 crore versus ₹1,052.80 crore in 9MFY25, suggesting persistent market challenges beyond seasonal factors / Material cost volatility evident with raw material consumption of ₹185.65 crore (61.6% of revenue) in Q3FY26 compared to ₹217.08 crore (62.8%) in Q3FY25, limiting margin expansion potential / Other comprehensive loss of ₹1.19 crore for 9MFY26 versus prior year, indicating actuarial or forex-related balance sheet pressures / Single-segment concentration risk in highly specialized engineering thermoplastics limits diversification benefits during sector-specific downturns / Employee benefit expense increased 11% YoY to ₹45.63 crore for 9MFY26 despite revenue decline, indicating negative operating leverage

Q3 FY26 standalone PAT increased to Rs 4,197.46 lakh from Rs 4,056.46 lakh YoY (+3.5%) despite lower sales, indicating cost and margin discipline. / Q3 EPS improved to Rs 1.69 from Rs 1.63 YoY, and consolidated Q3 EPS was also higher at Rs 1.70. / Cost structure improved: cost of materials consumed declined to Rs 18,565.23 lakh in Q3 FY26 from Rs 21,708.37 lakh YoY, helping protect profitability. / Very low finance burden (Q3 finance cost Rs 4.97 lakh; 9M Rs 15.36 lakh) and large reserves (standalone reserves Rs 97,558.43 lakh) indicate strong financial health. / Shareholder payout remains strong, with three interim dividends of Re 1 each already declared in FY26 (total Rs 3/share till date).

Revenue momentum is weak: Q3 standalone revenue fell to Rs 30,139.03 lakh from Rs 34,583.61 lakh YoY (-12.8%) and from Rs 32,509.76 lakh QoQ (-7.3%). / 9M performance remains below last year, with revenue down to Rs 93,439.67 lakh from Rs 1,05,280.17 lakh and PAT down to Rs 12,879.14 lakh from Rs 14,060.98 lakh. / Part of earnings support came from higher other income (Q3 Rs 971.85 lakh vs Rs 673.82 lakh YoY), which is generally less durable than operating revenue. / Business concentration risk is high because the company reports a single operating segment: 'Highly Specialized Engineering Thermoplastics'. / Execution and timing risk exists in the brownfield ABS expansion (75,000 TPA to 1,00,000 TPA) targeted for September 2026; delays could defer expected growth benefits.