Emkay Worldwide has supplied a buy score to Gulf Oil Lubricants India with a 12-thirty day period concentrate on price of Rs 870. The share price moved up by .10 per cent from its previous close of Rs 629.20. The stock’s very last traded price is Rs 629.85.
For FY20, Gulf Oil’s revenue/EBITDA/PAT was down 4 for each cent/up 1 for every cent/up 14 for each cent at Rs 16.4/2.87/2.03 bilion (Rs 40.4/sh EPS). PAT was driven by the decreased tax rate. EBITDA was largely flat because of to a 7 per cent volume decrease (110.5mn ltr), offset by 9 per cent EBITDA/ltr growth. Main volumes fell 2 for each cent vs. 6-7 for each cent for the industry. The board advisable the last dividend of Rs7/sh (total Rs14/sh, 35 for every cent payout).
March-conclusion commonly sees important schemes and sale actions, but the Covid-19 lockdown has seriously impacted volumes this time. The brokerage maintains 2-3 occasions sector steerage, though estimates pointed to double-digit field decline in FY21. Lube is a semi critical. Base oil charges noticed softness with crude, nevertheless weak rupee was an offset. The brokerage expects margin retention as issues stabilize. Selection of retail outlets elevated to 78,000 (10 for every cent yr on year). New B2B-OEM tie ups are underneath will work and cash position is nutritious according to the brokerage.
The brokerage claims estimating FY21 volume is difficult thanks to the lack of clarity. However, it expects material recovery in FY22. The brokerage has also constructed in a 14 for every cent/10 for each cent minimize in EBITDA/ltr. It values Gulf Oil at 20 instances FY22E EPS.
Important risks are adverse base oil price ranges-currency, levels of competition, economic slowdown, delay in Covid-19 recovery and technological alterations.
For the quarter ended March 31, 2020, the business claimed standalone sales of Rs 359.68 crore, down -14.74 for every cent from very last quarter sales of Rs 421.86 crore and down -17.54 per cent from previous year’s very same quarter sales of Rs 436.20 crore. The corporation noted net profit right after tax of Rs 35.94 crore in the most current quarter.
Promoters held 72.29 per cent stake in the corporation as of March 31, 2020, while FIIs held 11.96 per cent, DIIs 5.71 for every cent and general public and many others 10.04 for every cent.