🟢🟢 12-07-21 New Shorter-Term Momentum Idea
Confidence Petro Ind Ltd
LTP ~ ₹66.70/-
TP ~ ₹75/-
SL ~₹64/- Closing below
Buy above 62
Swing traders : within 10 to 15 days
Professional Swing Trader
⭐West Coast Paper: Promoters Veer Enterprises and Shree Satyanarayan Investments acquired 38,000 shares between December 30-31.
⭐Confidence Petroleum India: Promoters Confidence LPG Bottling and Essenn LPG Bottling acquired 5.25 lakh shares between December 28-31.
⭐V-Mart Retail: Promoter Smiti Agarwal sold 10,700 shares on December 31.
⭐Astra Microwave Products: Promoter C Prameelamma sold 70,000 shares on December 31.
⭐Satia Industries: Promoter Chirag Satia acquired 32,500 shares on December 31.
⭐Vardhman Textiles: Promoter Vardhman Holdings acquired 38,000 shares on December 31.
⭐Ganesha Ecosphere: Promoters acquired 15,250 shares between December 2-31.
⭐Bhageria Industries: Promoter Rakesh Bhageria acquired 5,318 shares on December 31.
#WSTCSTPAPR #CONFIPET #VMART #ASTRAMICRO #SATIA
Confidence Petro CMP 36 View:
The group has vertically integrated
operations, wherein the cylinder manufacturing units assist in providing an in house infrastructure for its
LPG Cylinder marketing (Go Gas), which is further supported by LPG Bottling & Blending units. Further,
the LPG Bottling & Blending units also serve as a hub to store Auto LPG Dispensing Stations for logistical
advantages, a rare combination amongst the industry players. The group operates in the packed
cylinder division and LPG Bottling & Blending under the brand name ‘Go Gas’.
- ROE and ROCE is around 16% and 12% respectively.
- Forward PE is around 40 which is high as per industry benchmark.
- Operating profit margin is around 15% which is stable and increasing trend in past two quarter.
- Muted revenue growth in Q2FY21 and negative growth in Q1FY21 due to lockdown impact
- Debt is declined in this quarter.
- Promoter holds around 54.1% in this quarter which is strong and stable, FIIs hold around 5%
- Promoter is continoulsy increasing their stake and more than 2% added in last 1 year and QoQ promoter is increasing their stake.
- The operations of the company are spread all over India with a total of 15
cylinder manufacturing units, 58 LPG bottling and blending plants and 227 ALDS stations at the group
- Reputed clientele: The company caters to various reputed
customers in the energy and oil industry, namely, Indian Oil Corporation Limited, Bharat Petroleum
Corporation Limited, Hindustan Petroleum Corporation Limited, LPG Infrastructure Private Limited
- The net worth of Confidence is healthy, estimated at around Rs. 458.65 crore as on March 31, 2020. The net worth levels have seen significant improvement over the last three years through FY2020 on account of healthy profitability.
- Debt is reducing in QoQ
- Strong operating cash flows and liquidity is also sound
- With an increase in usage of gas pipeline in the urban area, the group faces intense competition from the same. Further, the group is exposed to the sustainability of margins as the total raw material comprises of around 70 per cent of total sale.
- Company manufactures LPG cylinders and does bottling of LPG for IOCL, BPCL, and HPCL, which account for almost ~25-30 per cent of its revenue. The group gets orders through tenders and operates in a highly fragmented industry which profit margin is very muted. PAT margin in FY 20 less than 5%.
View Curent valuation seems high and as per continoulsy market reaching new peak share can reach 42-45 level in short term. Adding at CMP should be done on systematic basis or it can be risky too. Any correction in nearterm can be opportunity to add.
Views are personally in nature. This is not buying/selling recommendation. Please throughly due diligence or check with your financial advisor before enter or exit the shares.