Market Cap: ₹20 Cr.
BNR Udyog (Bse small cap) was formerly known as ‘Rathi Stock & Share Brokers Limited’ and as the name suggests, it was in the business of stockbroking-related services. However, they have changed their business model towards Business support services.
These include IT & ITES (Call Centers, Electronic Publishing etc), Data entry services, Database Management Services and Data Processing services.
Business Model and Focus
On their website, the list of services ranges from healthcare to construction. However, in the latest annual report of FY 24, the revenue is coming from ‘business support services’ which may include the ones which is written in the company profile above. It’s hard to tell if they’re making revenue in healthcare or construction as these don’t fall under ‘support services’.
The clients of BNR Udyog include NSDL, Total Cardiologgy care, SSAAT, High Court Hyderabad, Dena Bank, Eaadhaar, Telangana State Technology Services, TSCAB, Centre for E-governance and more.
How is the Top Management of BNR Udyog?
The founder of this Bse small cap company, BNR Group was Late Shri B.N. Rathi. According to the company website, he held various top positions in 28 companies. Shri K.N.Rathi, the Managing Director, has over 40 years of experience in finance and 15 years in IT.
Moreover, Sandeep Rathi has been the Executive Director since September 5, 2012, and oversees the company’s business operations. Shri J. Vikram Dev Rao is the current director of the company and holds an MBBS degree. Mr. Vikram is also the chairman of the Audit committee.
Since the Bse small cap company is relatively new with just ₹20 Crs of market cap, a lot of information about the management is not available. However, they have managed to turn around the financials of the company, and the management sees promising.
How Much Salary Does the Top Management Takes?
In the FY 24 Annual Report, it was revealed that the ratio of the remuneration of the top 2 directors to the median employee salary was near 5 times. This means that, on average, directors receive 5 times the salary of a typical employee.
Financial Analysis of BNR Udyog Ltd
“The first thing to note is the consistent growth in sales. BNR Udyog has completely turned things around since FY 21. However, the market has not yet recognized this growth, creating a clear opportunity as the current price is essentially discounted.
In the ratio analysis, Cash flow from operations as a percentage of sales has also declined consistently. This means that BNR Udyog is generating less actual cash from operations. Additionally, ROE and ROCE is getting better as of FY 23 data. The profit margins have also increased significantly.
Moreover, BNR Udyog’s debtor days are decreasing from 186 to 42 in 2023 and then 22 in 2024. This means the company is now receiving the cash in 22 days from the credit sales rather than in 186 days.
The Financial Forecast of BNR Udyog
The forecasted data, based on historical growth shows that a significant increase in sales growth is possible for BNR Udyog (Bse small cap)
How is the Industry growth of BNR Udyog?
The Information Technology Enabled Services (ITeS) industry has experienced significant growth in recent years. It is considered one of the largest job creators and has seen a growth of more than 10% in FY23.
Looking ahead, the growth trend is expected to be between 7% to 9%. The main driver of this growth is the non-discretionary nature of the industry, as it serves as a crucial support system for MNCs and larger companies.
Additionally, micro, small, and medium enterprises (MSMEs) like BNR Udyog are the main contributors in this segment. Therefore overall the industry is in a growth phase.
Disclaimer
The information presented here is for educational purposes only and should not be considered financial advice. Please do your own research before making any investment decisions.
