I thought petroleum mining was tied more to current crude oil prices rather that anybody's whims. Even if they don't want to search for oil, $100 barrel forces people to. So shouldn't we care more about the future price of oil rather than who's sitting in Dilli?
India is hugely dependent on oil import. Prices being high or low this import dependence puts India in a vulnerable position strategically. The current government wishes to reduce this and there is no other way except to start drilling more for oil & gas. Alphageo benefits from this tailwind. It has no direct correlation with oil prices as NSP is more of strategic in nature.
However, if oil prices harden there will be more global opportunities for alphageo as seismic survey activities will increase worldwide.
IMHO, this holds true for upstream mining companies. However, Alphageo is not one. Its into survey, data gathering and analysis around future oil prospect for the mining companies. So, not tied directly to oil prices.
Below is the visual fact that I was trying to emphasize on earlier post. A picture is worth thousand words.
@raj1968, I think towards the end, we have the approximate same view point in the mid term which is for ~1.5 years. For a prospect beyond that time horizon, I at least will be mindful of prevailing policy directions and other company specific developments.
There is already a tender out for around 500Cr from ONGC. Alphageo is one of the bidders. The award should be known by April/May. It means more tenders on seismic survey space coming.
This is this news from a paid subscription(oil & gas news) I have subscribed to. Can’t share more details.
Summary of performance 9 months FY17 vs. FY16 with more focus on Q3 this year vs. last year. (Q1 was when the tender was finalized officially and Q2 they cant have much of ground work due to monsoon)
In a very raw way of calculation,in Q3 they must have completed approx 5% of total work. Practically they got 7 quarters (after excluding monsoon quarters) till Oct’19 to complete this 27,000 Line Kilometer (LKM) 2D survey. So, assuming an even distributed for those 7 quarters, they should have a top line run rate of ~INR 2000M for those working quarters.
I understand this is not this simple and lag (for multiple reason) would be there, however, over a period of time this way of tracking will be a good indicator of project creep/uncertainty etc.
If they deliver Rs2000mn of sales in 4Q their full year EPS will be 4Q = 40 + 9M = 26 = Rs66. In that case the stock should do very well post 4Q. I think the broader market expects 4QFY17 to be similar to 3QFY17 that is why stock is languishing at the 900 levels for sometime now.
I guess stock might be subdued due to lack of clarity about future orders. As Raj mentioned few posts earlier, Alhageo has bid for some ONGC tender and once results are out in a month or two we might see next leg of rally.
Anyway it has formed a strong support around 900. I am hoping Q4 results, next year outlook by management and hopefully some order wins will bring momentum to this scrip…
[quote=“zoro99, post:77, topic:7114, full:true”]
I guess stock might be subdued due to lack of clarity about future orders. As Raj mentioned few posts earlier, Alhageo has bid for some ONGC tender and once results are out in a month or two we might see next leg of rally. [/quote]
Alphageo didn’t win the order. It went to another bidder. However, a third bidder has dragged ONGC to court as they were disqualified.
Now it’s all execution of the existing order which matters. I am expecting at least a 150Cr execution this quarter. Anyway, let’s see how much they are able to execute.
As the saying goes " In markets things happen as anticipated, but not in the same time frame."
“**The rating action is based on the best available information. As part of its process and in accordance with its rating agreement with Alphageo, ICRA has been trying to seek information from the company so as to undertake a surveillance of the ratings, and had sent reminders to the company for the same and for the payment of surveillance fee that became overdue; however despite multiple requests; the company’s management has remained non-cooperative. ICRA’s Rating Committee has taken a rating view based on best available information. In line with SEBI’s Circular No. SEBI/HO/MIRSD4/CIR/2016/119, dated November 01, 2016, the company’s rating is now denoted as: “[ICRA] BB+ (Stable)/ [ICRA]A4+ISSUER NOT COOPERATING”. ** The lenders, investors and other market participants may exercise appropriate caution while using this rating, given that it is based on limited or no updated information on the company’s performance since the time it was last rated.”
