Wednesday, August 12, 2009

Artson Eng Ltd...cmp 34.....My old call......

Friends ,
I remember I gave a call of Artson Eng in last bull run...that was a year or so back or more.It was doing no good but the reason at that I gave a call on Artson Eng was that Tata Project was taking over it and Tata is a name in itself.
Tata Project now holds 75% stake in Artson Eng.It is still in BIFR and the CDR is being sort out.

Let us see what Artson has expertise a nd why Tata Project and unlisted co of Tata stable tookover this co.Why Tata thought that Artson is good takeover candidate?


Artson Engineering Limited ,the Company is a provider of engineering, procurement and construction (EPC) contracts, involving solutions, ranging from design and engineering, project management, construction, quality assurance and guarantees. The Company undertakes projects relating to construction of tank farms, oil and gas depots and terminals, petroleum depots and terminals, power plants, fuel handling systems, as well as mechanical equipment erection, civil structure works for industrial plants, and composite contracts involving oil refinery turnaround/shut down.
Now I am writing down some orders which are latest and more will come to its kitty under the astute management of Tata Project...
Mumbai, 11th July 2008

The Company has received an Order from HPCL – Mittal Energy Limited for Crude Oil Storage Tanks (4 nos.) work for the Guru Gobind Singh Refinery Project at Bhatinda, Punjab. The total value of the order is Rs. 362.7 million.

Mumbai, 12th January 2009

The Company has received an Order from HPCL – Mittal Energy Limited for construction of Intermediate and Product Storage Tanks work for Guru Gobind Singh Refinery Project at Bhatinda, Punjab. The estimated contract value of the order is Rs. 191.70 Crore.

The contract scope covers construction of 64 nos. of Tanks involving steel works of approximately 21000MT. The contract scope also includes associated civil, fire fighting systems and oil –water separator works.

Time of completion for the total works under this contract shall be 18 months effective from 10th January 2009.

Mumbai, 22nd January 2009

The Company has been awarded an off- plot pipeline project construction work for 62 KM of pipe line work (consisting of sizes from 4" to 36") for various services like crude export, gas export, fuel gas and water injection line etc. The value of the contract is Kuwaiti Dinars 884000 (approximately Rs. 17 Crore). The duration of the contract is 12months and the expected completion is by end January 2010.


Mumbai, 20th March 2009

The Company has received an order from Indian Oil Corporation Limited for construction of storage tanks and associated facilities work for PRAEP projects of Panipat Refinery at Panipat. The estimated contract value is Rs. 21.58 Crore and the contractual time of completion for this work is 12 (twelve) months from 19th March 2009.

Operational Achievements:

This is latest...in 2008 so that no one tells that this is old news....way back.....

Reliance Group, Jamnagar Construction of 19 Floating Roof Tanks for Export Oriented Refinery, 3 Doom Roof Tanks for Alkylation Unit.

Essar Oil Limited, Jamnagar Construction of 4 Super Priority ISR Tanks, 2 Floating Roof Naptha Storage Tanks.

Heavy Engineering Industries & Ship Building Co., Kuwait Fabrication & Installation of 6 Storage Tanks at JO, Wafra Project, Kuwait

Fujairah Port Project Piping & Mechanical work (Pipe Size :- 3” NB to 32” NB) for IRM Terminal inside the Fujairah Port.

Technip India Limited, Chennai. Construction of 2 Vinyl Chloride Monomer (VCM) Storage Tanks for 160,000 MTPA S-PVC Plant for Chemplast Sanmar Ltd., Cuddalore.



On-going Projects:

The Company’s core competence lies in Oil and Gas Sector and Power Plants and it has successfully executed a number of projects, both domestic and overseas.

The Company is presently executing EPC projects at the following sites:

Shri Guru Gobind Singh Refinery Project, Bhatinda

In the month of July 2008, the Company has received an order from HPCL – Mittal Energy Limited for construction of 4 Crude oil Storage Tanks at Shri Guru Gobind Singh Refinery - a project being set up at Bhatinda. The estimated contract value of the order is Rs. 36.70 Crore.

In January 2009, the Company has received an Order from HPCL – Mittal Energy Limited for construction of Intermediate and Product Storage Tanks work for Guru Gobind Singh Refinery Project at Bhatinda, Punjab. The estimated contract value of the order is Rs. 191.70 Crore.

The contract scope covers construction of 64 nos. of Tanks involving steel works of approximately 21000MT. The contract scope also includes associated civil, fire fighting systems and oil –water separator works. The project execution activities have recently commenced.

Alghanim International General Trading & Contracting Company, Kuwait

The Company has been awarded an off- plot pipeline project construction work for 62 KM of pipe line work (consisting of sizes from 4" to 36") for various services like crude export, gas export, fuel gas and water injection line etc. The value of the contract is Kuwaiti Dinars 884000 (approximately Rs. 17 Crore). The duration of the contract is 12months and the expected completion is by end January 2010.

PRAEP Project of Panipat Refinery, Panipat

The Company has received an order from Indian Oil Corporation Limited for construction of storage tanks and associated facilities work for PRAEP projects of Panipat Refinery at Panipat. The estimated contract value is Rs. 21.58 Crore and the contractual time of completion for this work is 12 (twelve) months from 19th March 2009.


Now last I am going for Profile of the Co......

PROFILE:

Artson Engineering Limited, (the Company) was incorporated as a Private Limited Company on 18th September 1978.

Since inception, the Company was engaged in pioneering work in developing products and systems in fuel handling and tankage construction activities in Refineries, this led the Company to become one of the foremost companies in India with specialization in Petroleum Storage and handling systems.

In the year 1990, the Company established its own manufacturing facility at Ambad (Nashik) to support its Engineering Procurement and Construction (EPC) projects.

With a consistent record of dividend payment and two bonus issues earlier, the Company came out with its Initial Public Offering (IPO) of 18,00,000 equity shares of Rs. 10 each at par in the year 1992. The IPO was over-subscribed 9.5 times and the shares of the Company were listed on the Bombay, Delhi, Madras and Ahmedabad Stock Exchanges.

By the Year 1994, the Company was already engaged in the multidisciplinary engineering activities. The Company announced its ‘Rights Issue’ in the year 1994 with ambitious expansion plans to take up EPC contracts in the core sectors of Oil and Gas, Power Generation and activities of Cryogenic Tanks Construction. The Rights Issue was of 44,85,000 equity shares of Rs. 10 each at a premium of Rs. 15 per share aggregating to Rs. 11.21 Crores.

Over the years, the Company has developed its capabilities in the multi-disciplinary construction fields for the Hydrocarbon process industry and has successfully executed, on turn-key basis, many prestigious construction contracts. The Company has thus emerged as one of the leading Design Engineering Procurement and Construction Companies in the Petroleum Storage and handling system.

During the span of three decades, the Company has successfully commissioned, on turn-key basis, several fuel storage and handling facility systems and emerged as one of the foremost companies in the country which specializes in such systems. The Company’s expertise has gradually expanded beyond the Country and has been executing prestigious overseas contracts as well.

REFERENCE AS A 'SICK COMPANY'

As per the Audited Balance Sheet as on 30th September 2004, the Company's networth was fully eroded due to the accumulated losses. As a consequence, the Company was referred to the BIFR as a sick company under the provisions of Section 3 (1) (O) of the Sick Industrial Companies (Special Provisions) Act, 1985. The Company's reference as a sick company was registered under Case No. 152/ 2004 with the BIFR.

At the hearing held on 17th May 2006 before the BIFR, Bank of India was appointed as the Operating Agency to examine viability of the Company and if found feasible, to formulate a rehabilitation scheme.

The Operating Agency submitted a Draft Rehabilitation Scheme on 5th June 2007 and the same was circulated to various parties for their consent.

At the hearing held on 27th November 2007, the BIFR sanctioned the Rehabilitation Scheme of the Company and the Order sanctioning the scheme of rehabilitation was received on 18th December, 2007 (Sanctioned Scheme).

ADMISSION OF TATA PROJECTS LIMITED

In terms of the Sanctioned Scheme, Tata Projects Limited (TPL), has been admitted as the Strategic Investor and Co-promoter of the Company. TPL has committed financial assistance of more than Rs. 28 Crore, of which it has already infused funds aggregating to about Rs. 23 Crore.

TPL has acquired 75% stake infusing a sum of Rs.2.77 Crore towards Equity contribution. The Company has thus become a subsidiary of Tata Projects Limited.

TPL has also taken the Management Control of the Company and has inducted its representatives as Nominee Directors on the Board of the Company on 4th January, 2008.

In addition to the support in the rehabilitation of the Company as per the Sanctioned Scheme, the Company is in a position to derive benefits from TPL on many grounds including professional management, project execution intellect, quality services, TPL’s strong presence in core sectors of the economy and good governance practices.


My Comments:

Well,reading this, no one can say that this was a fake call or no one can doubt about the co credentials.Those who are doing this , saying that Artson is a gone case are doing no good to themselves as well as others.

Artson is a name in itself and one can see from what I have posted here.There remains no scope of any doubt for Artson Eng.Remember the 1 paid up is due to capital reduction due to huge accumalated loss and not that it is splitted to 1 paidup.Today it went for UC at 34.......

According to what I see Artson is a good candidate to hold for 2-3 yrs and one can get great returns in times to come.These are my personal view and one needs to take decision on their own.....but true to my inner wish to try and give fundamentally good stocks and I hope that if I commit a mistake it will taken in right spirit.........

12 comments:

  1. Dear nakul-rajeev,

    Thankyou for this wonderful compendium on the various business contracts that Artson Eng. has
    been awarded. When you fist gave a call on it calling it a dark horse, I studied about the company well. I immensely liked the company and its prospects and bought into it. I have all the holding intact and have faith in Artson doing very well.
    I retain my holding in XL too for the time being.
    The compendium on Artson contracts
    reinforces my faith in the company. Thanks once again.

    KM

    ReplyDelete
  2. Dear Rajeev,

    Psl Ltd won a order for 500 cr from gail and have given a very bullish statement along with it. They are projecting winning a majority of the 20,000 cr orders to be released by gail, gspl etc because of their expertise in pipeline manufacturing.

    Infact they have won the sixth consequitive order from gail in the last three years.

    We had also read in the newspapers the statment made by the new cmd of gail that their first priority is to release orders worth USD 6 billion for construction of pipelines.

    Thanks for bringing this stock into focus and my research radar. Have been lucky to accumulate 3550 shares of this wonderful company.

    ReplyDelete
  3. Dear Mitz,
    I have been reading many negative notes on PSL Ltd recently from various forums and mails but I am confident about my pick.....PSL is bound to flourish....

    ReplyDelete
  4. Negative news on PSl. Can you please direct me to some of these forums. Thats because whom ever i have spoken to on moneycontrol seem to take a liking for this stock.

    Thanks in advance

    ReplyDelete
  5. Mitz, this is what I got.....
    PSL Limited: Inefficient Management
    BSE 526801

    After a recent inter-action with analysts, the consensus view is the management at PSL Limited, is inefficient, backward looking and unable to foresee problems.

    This is apparent from Q4 FY09 numbers:

    While Revenues showed a quantum jump, net margins declined to roughly 1 per cent making building pipes another trading type of a business with no downward protection for any business exigencies or shaky trading conditions.

    The management cast the blame for a poor Q4 on currency losses, the INR Vs Dollar cross and huge rise in Steel costs, suggesting that it built steel sheet inventories at the highest possible point in time.

    The management has been unable to spell a clear vision for its Sharjah operations where orders are soft, as also the newly commissioned pipe mill in the USA. Plans for China are unknown as yet.

    The corporate carries a sizeable debt of Rs 1000 crore on a Equity of Rs 42 crore.

    The Debt is now to be swapped with Equity through a Rs 300 crore QIP which could raise Equity to over Rs 50 crore, another massive dilution.

    If current trends persist, PSL FY10 PAT could fall to Rs 60 crore on an even higher Revenue base, with EPS post dilution dropping down to Rs 10-12 from the present Rs 20 per share.

    The share can easily halve down from here over the next six months, and investors should seek better stocks to invest in. A clear thumbs down for the management.

    ReplyDelete
  6. ABOUT Gremach Infra

    Dear nakul-rajeev,

    I saw yesterday that the FII holding in this scrip has risen from approx 2% to 23%

    DO you have any idea rajeev if this is true or a mistake?

    I hold Gremach at a very high level... and would like to average it down...
    I didnt do it earlier when it was
    in 20's because of a strategic decision. I decided to first buy scrips like L&T Bhrati Shipyard Welspun Bartronics etc...at the kind of lows one may not see again...
    I continue to hold XL Tele for the time being for the same reason.. I first took your calls at 135 and then added upwards.. with an average of 180...

    Please advice on Gremach. Thanks and very warm regards as always.

    KM

    ReplyDelete
  7. Dear nakul-rajeev,

    I request you to give your views on Gujarat Mineral Development Corporation.

    Regards

    KM

    ReplyDelete
  8. Yes KM,
    The FII holding in Gremach has gone up and one need to take the clue from that.....u can average it down....but that one needs to take his own call....What I do here is just recomend and u have seen I have gone wrong many times...

    ReplyDelete
  9. KM<
    GMDC is a great co to hold....Keep a watch on Guj Alkali Ltd...now 100...

    ReplyDelete
  10. Dear nakul-rajeev,

    Thanks for your perspective on Gremach and GMDC. I did average
    down Gremach.
    I have put Gujarat ALkali on my watch list.
    As for your calls going wrong once in a way, but rajeev, that is how nature has intended.
    Always being right would be abnormal! In life as well as
    in stockmarket!!
    Moreover you have always given your calls with the caveat that people must dig and research and take the call on the basis of their own conviction...
    ONE'S OWN CONVICTION is the most important variable indeed.

    Thanks rajeev for being your self....

    Warm regards

    KM

    ReplyDelete
  11. Hi KM,
    Try to read the finer lines of my writing.Try to understand the HINT I give.
    When I say keep a watch it usually means it is a buy.
    See Guj Alkali is up already.....

    ReplyDelete
  12. hi rajeev,
    whats your view on artson engineering as on date.the share price has come down to Rs40 or so.has the fundamentals changed or whats the present state of fundamentals.pls help us by sharing your views.
    regards
    surjeet

    ReplyDelete