Confidence petroleum

Stock Opportunities
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Hello Friends,
I have come across a company called CONFIDENCE Petroleum. The company has significant presence in the LPG/CNG Energy. The company has primarily dealing in four sectors:

1: CYLINDER MANUFACTURING (core business):
Function: From more than last two decades with cylinder manufacturing as its core activity. Launched a new type of product in the name of go gas elite.

Features of go gas elite: BLAST PROOF, LIGHT WEIGHT (about half of weight than metal cylinders) , Translucent Visibility, Elegant Design,EASY handling etc.

Major clients: PSU like Indian Oil, Hindustan petroleum, Bharat petroleum and Private players.
Capacity of manufacturing: Company has 15 manufacturing facility at various locations in India like Nagpur(4 units in this region),Mumbai, Gujrat, Hyderabad, Jalpaigudi, Baazpur, Jharkhand . Cylinder manufacturing capacity of the group is 5 million cylinders per annum
2: Auto LPG Dispensing Station (ALDS):In the name of GO Gas Auto LPG Stations
Function: Auto LPG Dispensing Station. Today GO Gas Auto LPG Stations are available in Maharashtra, Karnataka, Tamil Nadu, Telangana, Andhra Pradesh, Gujrat, Rajasthan, West Bengal, Madhya Pradesh, Uttar Pradesh
CAPACITY:CURRENTLY COMPANY HAS 112 LPG DISPENCING STATIONS AS PER Q22018 PRESENTATIONS.

3: BOTTLING: India’s largest Private Sector LPG bottler in India.
Major clients: Actively providing Bottling assistance to Oil major PSUs Indian Oil, Bharat Petroleum, Indian oil etc.
Capacity/PLANTS: 58 POTILLING PLANTS in 19 states .

4: Packed Cylinder Division:

Franchise model: Also they are inviting people to open their own gas agency under the name of Go Gas (350 dealers available in India)

Various links(please check this):
http://www.confidencegroup.co/home.html
http://www.confidencegroup.co/CPIL%20WEBSITE/CPIL%20Q2FY18%20Result%20Presentation/CPIL%20Q2FY18%20Result%20Presentation.pdf

Note: Not posted anything on financials of the company as I m new in investing and researching on that front . Not invested.
Please share ur views.
If anything I have written wrong please correct me.

Thanks and regards
Ashish Agarwal

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This Company is on radar of Kochi based Ace Investor Porinju Veliyath. His firm EQ India Fund has taken exposure in the Company on 17th JAN 2018, as per BSE Bulk Deal section. Mr Porinju is known for identify small cap stock on an early stage. Company will be benefited from “Pradahamantri Ujjwala Scheme”, as per the CMD Mr. Nitin Khara. Pl watch the Vedio in Money Control link. Last two Quarters result are very impressive & Net profit margin have shoot up fantastically. Promoter is contentiously increasing stakes in the Company, which creates confidence. I am also tracking this Company closely. Have taken little bit exposure.

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Some big names checking in a particular stock doesn’t attract me becoz as fast as they enter they exit n u dont know when they exit…

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yes promoters of the company increasing their stake an od the company is biggest beneficiary of gov Pradmahamantri Ujjwala Scheme.can anyone suggest me any listed co which is competitor of this co?

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They are heavily expanding Auto LPG Dispensing Station business.
Which is a high margin business, i am from Bangalore and i am seeing man new gogas station coming up . they have plan of increasing upto 180 approx.I am personally holding this stock.

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Is it a well known brand in banglore?

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There are a few good points about their product Gogas Elite. It is made of ‘Composite’ material viz; is broadly plastic. This makes the cylinders very light and even better - blast proof. The inner capsule is translucent which helps to gauge the volume of gas present in the cylinder. The technology is advanced compared to the steel cylinders both in safety feature parameters and portability, YouTube has couple of videos on this product and the promoters.

Much will depend on the rollout capabilities of the promotors and distribution channel. As there is no govt. subsidy there is a price disadvantage vis - a -vis the PSU distributors. Since availability of cooking gas is the biggest headache, in my opinion, most householders will not mind the price differential. According to the MD of the company the 2 kg cylinders could be stocked by retailers provided the total capacity at the shop does not exceed 100kgs. This is a sweet spot if just a normal KYC is needed to make a purchase every time you run out of gas.

The Gas station business is dependent on government regulations making it mandatory for auto rickshaws to switch to LPG. Otherwise, the demand will be slow.

The bottling plants numbering more than 50 appears to receive steady order from the oil and gas PSUs and provides steady cash flow.

My concern is about the company’s dividend record and capex cycle. Also, could not find much information about procurement arrangement of gas from Middle East.

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can anyone know about the competitor of this company?Because i have searched a lot but i have found only local manufacturing players with limited capacity…

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I found confidence petroleum some time back while reading a newspaper, they published an advertisement in newspaper saying that they are a bse listed entity and hence i got intrested into it.

After doing some research i concluded that it could be a good buy at that time it was trading at 2-5 rs a piece but i didnt invested due to lack of liquidity.

After some time it posted good numbers and it came into news and the share rallied from 7rs to 39rs.

It could be a good opportunity despite the rise in share price,if everything goes well.

Disc.:- not invested,but its on my radar.
Cmp:- 29.80rs.

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Moreover it is biggest beneficiary of pradhanmatri ujjwala scheme and I think company has no major competitor…

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3 more new LPG dispensing stations commissioned

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Company is on right track of growth.

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I have a small query. As per the Q3FY18 result, Cylinder division contributed 35% of the revenue and remaining came from LPG division. Later in the document, it is written that Cylinder division includes petroleum and marketing operations of LPG/CNG cylinders and the LPG division includes LPG marketing and bottling business & others.

What I am unable to understand is what business comes under what. As we all know there are 4 business verticals - Cylinder manufacturing, Bottling operations, Packed Gas/LPG retailing and Auto LPG Dispensing Stations (ALDS). Can anyone clarify out of these four which are places under the “Cylinder division” and “LPG division”?

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Disc - Not invested

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The promoter of the company Nitin Khara is quite a well known businessman(bigshot) in Nagpur, where the company is based. Have checked with one of my friends from Nagpur itself. He’s said to have very good relations with govt authorities. EPS of the company is growing at a steady rate. Will update more on this forum once i complete reading the annual report. Your views are welcomed. Thanks!

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From the sources i got to know composite cylinder which is unique designed and at any stage doesn’t blast. This seems to replace the existing cylinders over a period. Looks to be a game changer!

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Guys, be aware and do due diligence before committing your hard earned money. 2-3 months back I got the watsapp message on the company’s news published in some Gujarati news paper. I was surprised that how come they know my number and when I asked there was no revert. I exited immediately. Be cautious…

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