Multi Baggers
GP Petroleums
BSE ID : 532543 NSE ID : GULFPETRO
RECOMMENDED PRICE 14.40
PEAK FROM RECO 103.60 619.44%
CURRENT PRICE 40.08 Resource id #35
The stock of Sah Petroleum offers considerable visible upside from its current market price in these uncertain times, in view of the Open Offer by NAF India Holdings.
Sah Petroleums Ltd
Background:
Sah Petroleums Limited is a manufacturer of industrial lubricants in India and manufacturing wide range of industrial and automotive lubricants, specialties and process oils etc., under the brand name of "IPOL". The company started in 1973 as a private limited company and became listed in 2004. The company has its plants located at Vasai near Mumbai and at Daman. The plants at Vasai and Daman are equipped with High-Tech blending facilities, quality control labs and automatic filling and packing stations. The company also has one of the largest in-house storage farms in the private sector in India for storing oil sourced from all over the world.
Besides, the company has an all India sales and service network with offices / depots / CFAs located in Mumbai, Pune, Vadodara, Indore, Jabalpur, Jaipur, Delhi, Ghaziabad, Faridabad, Kaithal, Chandigarh, Patiala, Kolkata, Jamshedpur, Hyderabad, Bangalore and Chennai.
Financials:
The latest financials of the company are given as under:-
| Particulars | Qtr Ended | Qtr Ended | Qtr Ended | Yr Ended | Yr Ended | Yr Ended |
| (Jun 08) | (Jun 07) | (% Var) | (Mar 08) (12) | (Mar 07) (12) | (%Var) | |
| Sales | 60.31 | 44.14 | 36.6 | 205.51 | 179.67 | 14.4 |
| Other Income | 0.76 | 0.51 | 49 | 6.7 | 3.96 | 69.2 |
| PBIDT | 5.43 | 4.01 | 35.4 | 22.67 | 15.38 | 47.4 |
| Interest | 0.66 | 0.48 | 37.5 | 2.72 | 2.93 | -7.2 |
| PBDT | 4.77 | 3.53 | 35.1 | 19.95 | 12.45 | 60.2 |
| Depreciation | 0.29 | 0.21 | 38.1 | 1.01 | 0.74 | 36.5 |
| PBT | 4.48 | 3.32 | 34.9 | 18.94 | 11.71 | 61.7 |
| Tax | 0.83 | 0.32 | 159.4 | 0.28 | 1.45 | -80.7 |
| Deferred Tax | 0 | 0 | - | 0.22 | 0.18 | 22.2 |
| PAT | 3.65 | 3 | 21.7 | 18.44 | 10.08 | 82.9 |
(Rs Crore)
| Latest Data As On 20/10/2008 | |
| Latest Equity(Subscribed) –Rs. Cr | 16 |
| Latest Reserve –Rs. Cr. | 67.58 |
| Latest Bookvalue -Unit Curr. (Rs.) | 26.12 |
| Latest EPS -Unit Curr. (rs.) | 6.83 |
| Latest Market Price -Unit Curr.(Rs.) | 14.4 |
| Latest P/E Ratio | 2.11 |
| 52 Week High -Unit Curr. (Rs.) | 29.3 |
| 52 Week High-Date | 1/3/2008 |
| 52 Week Low -Unit Curr. (Rs.) | 8 |
| 52 Week Low-Date | 10/10/2008 |
| Market Capitalisation (Rs.cr.) | 46.08 |
| Stock Exchange | BSE |
| Dividend Yield -% | 1.74 |
Conclusion:
Sah Petroleums has a current Equity Capital of Rs.16 crores comprising of 3.2 crore Equity Shares of Rs.5 each. The current promoters of the company hold 1.74 crore shares comprising 54.47% of the equity while the Non-Promoter shareholding is 45.53%.
The Board of Sah Petroleums in their Board Meeting on October 17, 2008 has resolved to issue 1.2 Crore Equity Shares of the company to NAF India Holdings Pvt. Ltd. at a price of Rs 26.65 per equity share on preferential basis, which comprises. This is roughly 27.27% of the diluted equity of the company. Since this investment constitutes acquisition of more than 15% Equity of the company, the transaction will necessitate a public announcement in compliance with the takeover regulations of SEBI. The acquirers alongwith persons acting in concert have made a Public Announcement for acquiring 88 Lakh shares, comprising 20% of the diluted equity at a price of Rs 48.50 per share. In all probability, the current promoters of the company would not be allowed to participate in the open offer. The current public shareholding is roughly 1.46 crore shares. Assuming all non promoter shareholders opt for the open offer and tender their shares, the acceptance ratio would be 60%, which means any shareholder tendering 100 shares in the open offer, will have 60 shares accepted by the acquirer at a price of Rs.48.50 per share. In reality, the acceptance ratio can be higher.
The stock of Sah Petroleums offer an attractive arbitrage with significant upside from the current levels, in these uncertain times. The caution here is that the time schedule for the open offer (December 4, 2008 as date of opening of offer) may get delayed, as has been seen in numerous other cases of open offer, due to delays in approvals & compliances.
Ashish Chugh is an equity analyst and investment consultant based at New Delhi, INDIA. At the time of writing this article, he, his firm and dependent family members donot have a position in the stocks mentioned above. The author, his firm or any of his dependent family members may make purchases or sale of the securities mentioned in the report while the report is in circulation. The author invites readers to send him email and welcomes comments, feedback & queries at nexgenfin@yahoo.com.
This report has been prepared solely for information purposes and the information contained herein may not be deemed to be an investment advice. Such information is impersonal and not tailored to the investment needs of any specific person. The information contained herein is not a complete analysis of every material fact representing any company, industry or security. The views expressed may change. While the information contained herein has been obtained from sources believed to be reliable, no responsibility (or liability) is accepted for the accuracy of its contents. Investors are advised to satisfy themselves before making any investments and should consult with and rely upon their own advisors whether and how to use such information in making any investment decision. Neither the author nor his firm accepts any liability arising out of use of the above information/ article.
3200
Powerful mix of technical and commodity packs with timely expert.
Designed especially for traders looking to tap the profit opportunities of volatile markets.
Stay on top of the Indian Commodities Market with commodity trading calls Intraday, and Positional (Short & Long-Term Calls).
