Gulf oil demerger

Stock Opportunities
1

Gulf Oil Corporation India Ltd (GOCL), which de-merged the lubricants division into a separate entity Gulf Oil Lubricant India Ltd (GOLIL), were listed on BSE and NSE today

The companyas lubricant business will be listing in a month. It has been ramping up capacity Expects over Rs 1,000 crore sales per year from this segment. As per Mr. Subhash Pramanik, Managing Director

Any views on the above

:

Gulf Oil Corporation

Price:

147

P/E: 25.00

BOOK VALUE (Rs):117.28
EPS (TTM):5.88
PRICE/BOOK:1.25

Gulf Oil Corporation India Ltd (GOCL), which de-merged the lubricants division into a separate entity Gulf Oil Lubricant India Ltd (GOLIL), were listed on BSE and NSE today.

Read more at: http://www.moneycontrol.com/news/business/lubricant-business-to-get-listeda-month-gulf-oil_1112513.html?utm_source=ref_article

Gulf Oil Corporation India Ltd (GOCL), which de-merged the lubricants division into a separate entity Gulf Oil Lubricant India Ltd (GOLIL), were listed on BSE and NSE today.

Read more at: http://www.moneycontrol.com/news/business/lubricant-business-to-get-listeda-month-gulf-oil_1112513.html?utm_source=ref_article

Gulf Oil Corporation India Ltd (GOCL), which de-merged the lubricants division into a separate entity Gulf Oil Lubricant India Ltd (GOLIL), were listed on BSE and NSE today.

Read more at: http://www.moneycontrol.com/news/business/lubricant-business-to-get-listeda-month-gulf-oil_1112513.html?utm_source=ref_article

2

I think the demergers are very good oportunity specially when market is so high, there are two other demergers going on that i know of.

thanks

3

Which two are you talking about?

Is one Crompton?

4

Highlights of the Concall of Gulf Oil Lub by Capital Mkt;

  • The company achieved a growth of 12% in its net income from operations at Rs. 230 crore in Q1FY’15 as compared to previous year same quarter, when it was Rs. 207 crore.Profit before Tax for the quarter has grown by 11.8% at Rs. 26.57 crore compared to Rs. 23.76 crore in the corresponding quarter of the previous year. Profit after tax was Rs. 18.03 crore in Q1FY’15.Company has delivered EBIDTA margins of 13.0% for the quarter vs 12.25% in FY’14 for Lubricants business.
  • Volume growths have been positive during the quarter, with emerging signals towards the end of the quarter that could lead to a pick up in the overall related economic activities & demand factors.
  • With respect to automobile industry vehicle sales during the quarter â the Commercial Vehicles segment de-grew by around 16%, passenger vehicles came into the positive territory marginally with a 1% growth & 2 wheeler growths picking up to 13 %. Tractor sales growth was not positive after a stellar performance last year, the delay in monsoons impacting this segment.Company expects to better its performance in coming quarters given above positives.
  • The company continued to invest in strengthening its brand position by launching a special outdoor campaign â “Oil Change, Life Change”, coupled with an exciting Consumer Promo â"Gulf Super King Size (SKS) Offer" in Tamil Nadu â which synchronized with the Indian Premier League (IPL) in which Gulf Oil sponsors the Chennai Super Kings team.
  • A Special All- India Rural Retailer focused van promotion initiative was launched to increase distribution to boost the sales of diesel engine oils for the tractor segments & motorcycle oils in leading agricultural markets during the quarter. In addition, for key transport markets, a number of retailer meets were held, where exciting retail promotions were announced to increase secondary sales. This helped to increase sales for smaller packs, which enabled the company to improve it’s margins & record positive volume growths during the quarter.
  • The company has no long term debt at the end of quarter ended June 2014. The company has only working capital loan of around Rs 80 crore.
  • The company is doing a capex of Rs 40 crore for Silvassa plant increasing its capacity from 75000 tonne to 95000 tonne in addition to Rs 120 crore capex for Chennai plant for setting up a new 75000 tonne. Silvassa plant is expected to be complete by December 2014 while Chennai plant is expected to start from Q3FY’15 post which it would take around 2 year to complete.The company expects a volume growth of 2-3 times overall industry growth.The company expects a topline growth of 10-15% in FY’15 while maintaining its margin above 12%.
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After demerger, it’s now gulf lub and GOCL

For GOCL

MNC co, total 900 cr mkt cap (4.95 cr shares)

75% promoter holding (Hindujas)

Top 100 shareholders hold 20% remaining shares

Mkt float max 20 lac shares

Debt free co.

650 cr valuation of investments in Quaker chemicals (USA),Has 4.27 lacs shares valued @ $197, receive $ 3 million as dividend yearly

10000 cr value of land parcel kept as collaterals

â‚ą25cr to get yearly on collateral given

Diversified co, into Mining, explosives (defence too), infrastructure and reality

Ready to move project at Ecopolis, yelankana Bengaluru, total 75 lac sq feet, in 3 phase, Phase I ready, â‚ą35 psqft rentals

100 acre plot at Kukatpally Hyderabad, planning for project for residential commercial, govt approvals received

500 acre plot in dispute at Kukatpally Hyderabad, with udasin mutt, which would be resolved

Has land parcels pan India

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2 Likes
6

Anybody still tracking the company ?

Value unlocking opportunity … Latest Filing for Land Sale

Hyd Land Parcel Sale for Rs. 3500 Crores to be carried out over a period of 18 months…
Mkt Cap around 2100 Crores…

1 Like
7

Hello members,

My first post here.

Was doing some back of the envelope calculations on the land value. GOCL claims it will sell 264 acres for Rs. 3,402 crores, which works out to around 12.88 cr/acre.

The going rate as per property websites is between Rs 40-55 cr/acre.

Even at Rs 13cr/acre the company looks attractive, but was wondering if there’s something fishy, or if there’s a rational explanation for the underpricing.

On another nots, I observe that GOCL lost its case against Udasin Mutt both in the High Court, and in the Supreme Court (in 2023).

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One reason could be the promoters are taking some part in cash. The lane is in prime area and any developer would readily want to purchase it. I read on Income tax officials raid realty major Phoenix | Income tax officials raid realty major Phoenix that some minister has earlier forced them to sell the piece of land transacted earlier.

Still, even just considering the land parcel of 3402 crores, and that the money would be reflecting in company books in a few months, the company seems to valued low. What going be the cause? Any ideas.

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At the cost of sounding faceticious, you could say it is “Hinduja Group Discount”. Another group company, Hinduja Global Solutions, got a ton of cash by selling its healthcare business. They did pay a good dividend, and did a buyback, but then proceeded to lend a large sum of money to another group company at absurdly low rates.

“Taking some part in cash” could happen for some companies, but here they have no need to - they’re selling it to a non-publicly held group company.

1 Like
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Yes, but maybe that group buying the plot doesn’t want to deal in cash. On your other point, if the market doesn’t want to rate the incoming call flows highly, how should the forum value the stock. Like other holding companies of Kama, Bajaj holdings where the discount is upto 60% or more like Tata investment corporation or Rajapalayam mills which have lower discounts. Since they have other plots and have also lent money and have 10% stake in Hinduja UK hotel, can we expect a higher valuation in coming years.

11

My mistake regarding another group company. The 3402 cr is in partnership with Squarespace Builders. There’s some other Joint Development Agreement with Hinduja Healthcare Limited for a smaller parcel of land.

The other point is this - the Hinduja group is known to do related party transactions at a disadvantage to the shareholder. Hence the discounting. Their actions in Hinduja Global Solutions, and the apparent underpricing is cause for concern. Hence the drastic underpricing.

If they’d buyback the the shares with or distribute the whole amount as dividend, it’d be one thing. What’s the guarantee that they won’t lend to another group company at 4%, which they have done in the past.

Having said that, the price may be so undervalued that even if you take into account possible company activities not in the interest of the shareholders, you may still make a tidy profit.

1 Like
12

Stock price rose 12% in last 5 days with good volume. Could not find any triggers or updates. Does the market know something?

13

Anyone tracking this stock. Not much movement or update regarding sale of Kukatpally land. Hoping to see the cash flow in next quarter results.

Next trigger should be either the Kukatpally land sale funds’ next tranche, or sale of any other plot.