The Bombay Burmah (BBTC)

FairStock Score: 72/100 — STEADY

Score breakdown: P/E: 3/3 · ROCE: 2/2 · Growth: 0/2 · Dividend: 0/1

Key Financials

Strengths

• High profitability: ROE of 19.66% and ROCE of 35.52% indicate a strong franchise and efficient use of capital.
• Low leverage: Debt/Equity of 0.28 and free cash flow of ₹1,373 Cr give financial flexibility.
• Healthy balance sheet: Piotroski F-Score of 7/9 and Altman Z-Score of 3.39 suggest low bankruptcy risk.
• P/E of 10.91 with Graham Number of ₹1,697.38 above the current price suggests earnings-based value support.
• Promoter holding of 74.05% aligns management with minority shareholders.

Concerns

• Profit growth of only 0.84% despite sales growth of 7.24% implies margin compression or higher costs.
• DCF intrinsic value of ₹1,001.38 is below the current price, and margin of safety is just 0.19%.
• EV/EBITDA of 30.64 is expensive, making the operating earnings valuation unattractive.
• Dividend yield of 1.00% is low for a slow-growing business.

AI Analysis

When I first look at a stock, I ask whether the business can generate high returns on capital without excessive debt. The Bombay Burmah answers that with 19.66% ROE and 35.52% ROCE. A debt-to-equity ratio of 0.28 and free cash flow of ₹1,373 Cr add strength. The Piotroski score of 7 and Altman Z of 3.39 confirm the balance sheet is solid. Promoter holding at 74.05% means the people in control have real skin in the game. These are good qualities. But good quality is only the first half of the equation. The second half is price. At ₹1,542.45, the market cap is ₹11,821 Cr. The P/E is 10.91, which looks reasonable on the surface. Book value is ₹807.16, so the price-to-book is 1.91. Graham-style value? The Graham Number is ₹1,697.38, so there is a small theoretical premium to price—but margin of safety is only 0.19%. That is barely enough to compensate for a mistake. Worse, the DCF intrinsic value is ₹1,001.38, below the market price. The growth story is not convincing: sales grew 7.24%, but profits grew only 0.84%. Margins are being squeezed, or the profit line is not following sales. EV/EBITDA is high at 30.64, so if I view the whole enterprise, I am not buying an undervalued operation. Dividend yield is 1.00%, modest. This is a conservatively run, high-quality business with permanent capital, but it is not a bargain today. I would wait for either a lower price—perhaps closer to the DCF range—or for profit growth to catch up with sales. That is the margin of safety this investor requires.

Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer