Saturday, April 23, 2011


SAH Petroleums is relatively a new comer in the business of blending and marketing of automotive engine oils .Company already having presence in industrial lubricants,Transformer oil,White oil  and rubber process oils.
Company having two units ,one at Vasai and other at Daman.SAH marketing its products under the brand name 'IPOL'. Even if this industry is lead by multinational companies like Castrol and other PSU oil  companies  ,Sah could survive and grow steadily in past few years.Considering the potential of the industry and the prospects of the company ,in 2008 Sah Petro was taken over by NAVIS CAPITAL ,a private equity player based in Malaysia. Navis is one of the largest Private equity firm in South East Asia and it is currently  holding about 62% stake in this company .Out of the total equity of Rs.22 Cr only  10  % is held by general public.Now company is establishing a pan India marketing network to expend its operation where there was no presence earlier. Last year company posted a turnover of Rs.288 Cr and a net loss of Rs.6 Cr.With the effective initiatives including cost reduction  company back to black in the lasted nine months.For the nine month period ended December 2010 ,SAH posted a top line of Rs.250 Cr and a bottom line of Rs.11.5 Cr  and an EPS of Rs.2.9 on FV Rs.5 shares.Even if the cost of raw material is on a rise ,due to good demand company can pass on a portion of it to the end users. The most attractive part of this company is that it is owned by a P/E player with good track record.There is every possibility that  in future this company  may sold to some large national /international players from oil/lubricants industry at a premium to the current market price.Even we exclude this possibility , turnaround performance of SAH deserves a close look at CMP of Rs.27/-

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