Monday, November 9, 2009

Petron Eng........My old pick....recomended at 169 in Sep 09....

I have time and again came out with stocks which I felt like becoming a large size.In past stocks like Gayatri Pro,Madhucon Pro,Lumax Ind,Apar Ind, Navin etc has been focused here.
In Mid sep 09 I came out with a BUY call on Petron Eng and I remember on the very previous day it went in for a 20% upper circuit and still I came out with a buy call.Those reading my blog must be thinking that I am trying to offload my holding and hence I am recomending stock which has been in 20% upper circuit.
I have been accused of that in past.
Petron then went down to something like 139 , but finally it is over 200 and made a 52 week high at Rs229 and settled at 219 on last trading day.
I am here pasting latest interview of their MD which I retrieved from Money control site...this interview was given on 16th Oct 09...

Read on:

Petron Engineering Construction is mainly into refineries, petrochemical, cement, and power sector.
TS Das, Managing Director, Petron Engineering Construction, says the company has a current order book of around Rs 1,000 crore. “We expect orders worth Rs 400-600 crore in next two quarters.”

Here is a verbatim transcript of the exclusive interview with TS Das on CNBC-TV18. Also watch the accompanying video.

Q: Your company provides services to companies in the refinery, power and cement sector we understand. Could you take us through what has been the flow of orders? What was it at the peak in 2007-08, and what was the fall? Are you seeing a revival in order book?

A: Yes. We are mainly in the refineries and petrochemical, cement and power sector. After the recession, our order books are looking up, and are much better. Presently, we have an order book of about Rs 1,000 crore. We have compared to the last year – we used to do a turnover of around Rs 280 crore and now this year we have done around Rs 460 crore. So, things are looking up and the situation seems to be good, because the power plant sector is coming up in a large way, and cement, which had slumped slightly, has also come up in a big way. A few refineries are also on their way. We are always a player in the refinery business. Currently, refineries, what we are doing is for Bharat Petroleum and Bina Refinery; we are doing it in Panipat, Bhatinda Refinery and also in Chennai Petroleum.

Q: Are there expansions happening in that space, or are people pulling back their capex in refinery?

A: No. They are very much in full blast. Rather we are in a tight schedule. I would say in Chennai Petroleum and Gujarat Refinery, we are fighting against time and trying to complete the plant for them. Similarly, Paradip Refinery has now started in full blast. So, all the packages for the territory has come up, which is pretty good.

Q: Could you give us some sort of a timeline when these Rs 1000 crore worth of orders would be executed over what time period? Your blended operating margins have been at about 7.25%, previously it was at about 7.4% on YoY basis. On a net profit level, you are just making a margin of about 2-2.5% odd. Are we seeing better days because I believe there were certain legacy orders that you have written off at this stage?

A: Yes. I think this is the present situation because we have inherited some legacy orders after the takeover of the company a couple of years back. But now we have done most of the write-offs and that created the main erosion in the margins. Now I think it should look up for the future because the order book position is also good. So, we should be able to do better.

Q: What sort of a margin level do you sense you would be working at, at an operating level?

A: At the gross level, I would say this kind of business is around 10%.

Q: How much would you be expecting over the next couple of quarters in terms of an order flow?

A: In the next couple of quarters, we should be expecting in the region of around Rs 400-600 crore worth of orders because we are also following up with a few of them in the power sector. Refinery is one of the main areas, which is coming up very well. Mangalore Refinery packages are coming up and similarly for the Paradip Refinery as well.

Some BIG orders I am listing here :

Petron Engineering wins Rs 3.83 billion order from Utility Energytech :

Petron Engineering Construction has informed that it has won an order of Rs 3.83 billion from Utility Energytech and Engineers, Noida, Uttar Pradesh (UP).
Company's scope of work under the order includes erection of boiler package at Rosa Stage - II, thermal power project, UP.
The sources informed that the conglomerate runs through its five divisions of Construction, Pertron Mechanical Industries, Petrofab, Petrotech, as well as Rockwool Insulation.
Petron Engineering Construction is a leading provider of total solutions in engineering construction.

Petron Engineering wins order worth Rs 154 crore :

Mumbai-based Petron Engineering Construction has secured an order worth Rs 154.42 crore from PowerGen Infrastructure for construction related works.
The scope of work includes erection and associated works of Boiler, Auxiliaries and TG Auxiliaries of Unit No. 1 and 3 out of 3 x 660 MW Tiroda Thermal Power Project of Adani Power Maharashtra at Tiroda, Dist Gondia, Maharashtra.
Petron Engineering incorporated in 1976, provides services in mechanical, erection, piping, electrical, instrumentation, painting, refractory and insulation work for refineries, chemicals, petrochemicals, cement, fertilizers, metallurgical, power plants and other industrial plants.

Petron Engineering gets order worth Rs 352 crore:

Petron Civil Engineering, a subsidiary of KazStroy Services Plc. has bagged an order worth Rs 352 crore from Hindustan Petroleum Corporation-Mittal Energy joint venture. The total order stands at Rs 600 crore and is meant for the Guru Govind Singh Refinery Project at Bhatinda (Punjab). The contract work would include civil, structural, underground piping and pavements for units.

My Comments:

Over and above they have a very good record of completing the projects well in time .The clients list is big and strong like BHCL,HPCL,Ril Ind, Chennai Petro,Zuari Agro,RCFL,GSFC,Grasim,IOC,BPCL,MRPL etc etc.....the list is long ...and when Ril give certificate that Petron has completed project well in time , it speaks volumes about this co as Ril is known for completing project ahead of time or in time......otherwise they will not give orders to any Co....

The future of Petron Eng is looking extremly bright to me .....


  1. dear Rajeev bhai
    reg: Yash management

    They are leaders and inventors of nanotechnology products.
    they have launched Highly Sensitive Nanometal Surface Enhanced Raman Substrates as the first product. Many more products like metal sponges, and modified AFM tips are coming shortly.

    Nanotechnology will have huge effect on many industries incl. manufacturing , health care, communication, agriculture, energy, power,transportation and electronics.
    Nanotechnology is already been applied in the fiels of : medial and pharma, textiles, agriculture,telecom, automotive, aerospace,enery, defence,chemicals.

    you may find more details on this link

    it is still available at cheep rice @ bv of 15 and fv of 10

    pl advise can it b a multibegger n is it a buy ..........

  2. Hi Rajeev,
    After the experience of Singer India, i will believe in you about future prospects of company.
    I came across Guj. Reclaim & Rubber products.
    +ve Points- Good promoters share holding, No FII, Only Public and Promoters,Low equity,FV=10,Below its peer's PE, Good dividend yield,Unique different kind of business.
    -ve Points- CMP of 577,T- group share, so have to buy in 50 multiples only, very low volume traded,? future of its business.

    Putting link for their web-site

    How do you see future of this company? Can it become Multi-bagger at CMP?

    With Regards,

  3. hi rajeev,
    what do you think about RISHI LASER LTD.It is engineering company that deals with the cutting of metals by laser which is new to india but popular in European countries.Moreover, the well known investor RJ is having 14% stake in the counter bought at it is trading at price 37..Can it be multibagger from this level...

  4. Sandeep,
    The growth is still not visible.Where is the sales?It will take time....

  5. Vikas,
    Yes,Guj Reclaim is looking good.
    But why don't you look at stocks which I use to write here.
    I use to give scores of stocks....

  6. Lucky,
    When RJ is there, is there any need for my opinion.....!

  7. Dear Rajeev,

    Investment & precision casting has identical website to Tamboli casting .Is Tamboli cast is subsidary of Inv & pre but Tamboli family is resigning from directorship of Inv & pre .Is it true that tamboli casting is entering into aerospace parts. what is your view about both campanies.

  8. Vikas,
    Investors like you , professtionals , should go all out and buy big stake in co like KPIT Cummins, Apar etc....they are fundamentally very strong co....and not to try to find stories....ofcourse one can buy small stake there but the main percentage should go to these stocks only...

  9. Dear Rajiv

    Do you track Transport Corporation of India (TCI). Any views on real estate part of TCI getting unlocked in near future.



  10. TT,
    Tamboli casting is not listed.They have sold some stake to one of a very big investor.That was the reason I recomended it here when i saw that in bulk deal....
    Investment Pre is a very good buy at this stage, but don't expect fire crackers soon...

  11. Dear Rajiv,
    LT Foods has alloted a large no of shares in a deal to a firm of mauritius at Rs 66 i.e. 10 plus 56 premiium, while its share price is only 57.90 . what does it imply. will its current market price run up. The exact announcement is as follows:-
    LT Foods Ltd has informed BSE that the Board of Directors of the Company at its meeting held on November 09, 2009, inter alia, has authorized to allot 38,48,485 (Thirty Eight Lakhs Forty Eight Thousand Four Hundred and Eighty Five) Equity Shares of the face value of Rs. 10/- each, for cash, at a premium of Rs. 56/- (Rupees Fifty Six) per Equity share aggregating to Rs. 66/- (Rupees sixty six only) per share being the price which is in accordance with Securities and Exchange Board of India (Issue of Capital and Disclosure Requirement) Regulation, 2009, as amended from time to time, to be allotted on preferential allotment basis to the following allottees as per the details given under:

    1. Name of allottes: Indian Agribusiness Fund Ltd.
    - No. of Equity Shares allotted: 3835015

    2. Name of allottes: Real Trust
    - No. of Equity Shares allotted: 13470.
    what does it imply.
    regards sandeep singh

  12. SS,
    LT Foods is looking good at this rate.It has come down and that is a chance to buy a future multibagger.
    Its name is changed to Daavat.
    The same name of Basmati RICE we see in grocery stores and they export in big way too.....

  13. Amit,
    I think Ramesh Damani is tracking and recomending it in his chat since long.

  14. Hi Rajeev,

    Hope you are doing fine.
    What do you think about FDC Ltd.
    There is an increment in there bottom line and a large percent of the scrip is held by UTI/Mutual funds and FII's. Rescently the promorters went for a Buy back as 60/-. What do you think about it at CPM.

  15. Dear Rajeev,
    In indian newspaper there are lot of articles are coming on green energy I just entered XL tele.Morgan Stanley offloading stake in XL tele . Is solar story is still intact in XL tele or some other company come in that space.


  16. Rajeev Ji,

    XL tele gets order from BSNL after beating Moser baer. Punj lloyd is also entering into solar energy sector.Punj llyod has better govt relations.whom do you think comes best.


  17. TT,
    32 cr orders are peanuts.When the loss is 200 cr ,32 cr orders do not make any sense.They says that will have repeat orders but that is not enough according to me XL tele.
    But my friends are bullish on XLtele ....let us see....

  18. Rajeev,
    Welspun guj, jindal saw have all gone up more than 6 to 7 times. However psl refuses to budge. Why is it so?

    Please advice as i have bought 2000 shares reading your recommendation.

  19. Dear Rajeev,

    Chinese are supplying cheaper pipes than indian make so govt is imposing duty on imported pipes . but what happen at international market

  20. Dear Rajiv,
    I am giving this info for the benefit of all our friends and of course your comments. This is from the announcements of the BSE please.

    Kavveri Telecom Products Ltd has informed BSE that the Company's subsidiary Kavveri Telecom Infrastructure Ltd has signed a long term agreement for ten years on BOL basis with a second operator, who is one of the major cellular operators, for the INBUILDING WIRELESS solutions on pan-India basis. This agreement will contribute to substantial revenues of the Kavveri Telecom Infrastructure Ltd.
    Sandeep Singh.

  21. Thanks Rajeev.
    Though I am professional, I am in medical practice sine 2 yrs only. So have less capital. Still trying to cut out junks from my 30-odd stock portfolio and will definitely go for KPIT-Cummins.
    With Regards,

  22. Dear Rajeev

    Have you seen Shankar Sharma's chat transcript on moneycontrol. He is sounding very bearish. Would you like to comment.



  23. Mr Dineshswamy,
    If you feel that PSL is not running you are always FREE to sell it and switchover to other stocks.....
    I just give my view here.....take your own call....

  24. Amit,
    I do not agree with what he is saying.For his answers one needs to go through Marc Mobius interview....

  25. Hi Rajeev,

    How important do you feel is the commodity TAG on parekh Aluminex stock ( As the products are not branded even though it is a major player in its field)

  26. Amit,
    I ddin't understand what you mean...

  27. Rajeev,

    I meant Parekh products are without any brand isn't this a hindrance as far as P/E upgrade of a company is concerned. The P/E market offers to Parekh Aluminex is simply of a commodity company.

  28. Amit,
    Everything can come afterwards.What one needs to understand is , if the stock offer value.....ofcourse it is your choice how u wants to go with it....