SAVITA OIL TECHNOLOGIES

SAVITA OIL TECHNOLOGIES

LISTED ON BSE AND NSE

SECTOR- REFININERIES/PETRO PRODUCTS

CMP- 1450 (AS ON 2 FEB 2018)

MARKET CAP- 2117 CR

➤COMPANY OVERVIEW

Savita Oil Technologies Limited (SOTL), formerly Savita Chemicals Limited, is a leading producer of Petroleum Specialty Products and is also engaged in wind power generation.It  has been pioneering petrolelum speciality products. Whether it’s liquid Paraffins or the high techfilling compounds for Telecom cables. It has been forefront of supplying vital inputs to industries as diverse as power, petrochemicals, telecommunications, Pharmaceuticals, Cosmetics, and Plastics etc. SAVONOL & TRANSOL are quality products manufactured by sovita in the most modern continuous process plant, the only one of its kind in India.

It manufactures liquid paraffin, an import substitute, for the first time in India at its plant in Bombay. Since then, it has expanded its product profile and is today one of the leading manufacturers of petroleum specialties, which include products such as petroleum sulphonates, transformer oils / white oils and petroleum jellies, among other specialty products.

The company has tied up with Japanese oil major, Idemitsu, which will supply the technical know–how to manufacture and market its entire range of automotive and industrial lubricants. 

The demand for company's product is increasing, for this company has plan to expand its network in Western, Northern and Southern India

Product Profile and Major User Industries;

Transformer Oils, White Oils / Liquid Paraffins and Lubricating Oils are the major products of SOTL. The development and growth of the power generation and transmission infrastructure within the country mainly decides the demand for Transformer Oils. The demand for Liquid Paraffins and White Oils is determined by the market for cosmetic, pharmaceuticals and personal care products. SOTL produces two types of Lubricating Oils i.e. Automotive Grade and Industrial grade. Automotive Grade Lubricating Oils are used by all the leading Automobile players for all types of vehicles whereas Industrial Grade Lubricating Oils are used by all the major Power Equipment Manufacturers, Marine Sector etc.. Apart from Petroleum products, SOTL has also ventured in to Wind Power Energy. 

Products manufactured by the company include:

· SAVONOL – Liquid Paraffin  

· VITAGEL – Optic Fibre Cable Filling Compound

· TRANSOL – Transformer Oil  

· SAVOFLOW – Pour Point Depressants

· TECHNOL – White Oil   

· SAVSOL – Lubricants

· SAVOGEL – Petroleum Jellies   

· SAVOWAX – Waxes

· SAVOFIL/SAVOFLOD – Cable Filling Compound  

· IDEMITSU – Automotive & Industrial Lubricants

· SAVOX BW300 – Emulsifiable(Oxidized) Polyethylene Wax  

· SPECIALITY WAX EMULSION – For Leather finishings, Water based paints and Printing inks

MAJOR PRODUCT PORTFOLIO

➤TRANSFORMER OILS

Transformer Oils are electrical insulating oils produced by distillation of virgin paraffinic and naphthenic crude oils followed by modern technologies involving high pressure hydrogenation and hydro-treatment. All the processes are monitored closely and appropriate Base Oil fractions are selected for further processing. Further processing involves removal of moisture and polar impurities to obtain good electrical properties. The technologies result in products with very low pour point, excellent oxidation stability, cooling characteristics and electrical properties. These properties make them suitable for the most demanding transformer applications.

APPLICATION-The transformer oils are used in Distribution & Power Transformers, Switchgears and Circuit Breakers

➤PETROLEUM JELLIES

The Petroleum Jellies are used as an ointment base, protective dressing and soothing applications to skin. These gels offer excellent barrier to moisture and thus prevent moisture loss from skin. Savita's Jellies are used in formulating various cosmetic and personal care preparations like hair conditioners, hand cleaners, lip balms, massage creams, moisturizing lotions, and sun care products and in various pharmaceutical applications such as skin protecting ointments, medicated ointments etc.

Savita offers the following Savogel products:

Ultima White, Snow White, White Petroleum Jelly and Yellow Petroleum Jelly.

These products cater to different market segments and application needs of customers.

➤WAXES AND WAX DERIVATIVES

Savita’s Microwax HP500 is used for applications such as coating textile fibres, tyres and rubber compounding.

Savita’s Polyethylene wax PE100 is used in compounding formulations of Master Batches in polymer processing.

Savita’s oxidized wax BW300 is used for making emulsions which are used in the textile industry extensively. These emulsions are coated on the fabric, yarn or thread. The coating lubricates the yarn and thread and imparts improvement in the tensile strength, which results in improvement in their wear and tear characteristics. Wax emulsions, when coated on a finished fabric also imparts soft feel of the garment.

Wax emulsions, MA35, MI35 & S5 emulsions, manufactured by Savita, are used for coating applications for paper, textile, leather, printing ink and metal working industries.

➤TELECOMMUNICATION COMPOUNDS

Telecommunication Compounds are used in the manufacture of Copper Cables as well as Optic Fibre Cables

The compounds fill voids in polyethylene insulated and sheathed Telephone Cables. Their basic function is to prevent moisture penetration into the cables in case of any damage to the cable sleeve.

The filling compounds used in Optic Fibre Cables have to meet specification related to moisture tolerance, softness at low temperature down to -40 deg C and stability at a high temperature of 150 deg C. Savita offers wide range of products meeting these requirements of customers across the Globe

➤WHITE OILS

White Mineral Oils are extensively used as bases for pharmaceuticals and personal care products. The inertness of the product offers properties such as good lubricity, smoothness and softness and resistance to moisture in the formulations.

The products are also used in the Polymer processing and plastic industry such as polystyrene, polyolefin and thermoplastic elastomers. The oil controls the melt flow behaviour of the finished polymer besides providing release properties. Very often the oils also impart improvement in physical characteristics of the finished product.

Food grade Mineral Oils can be used for direct food contact applications such as dough divider & dust suppression in grain silos. These oils can also be used for lubricating food handling equipments and impregnating food packaging & wrapping papers.

➤LUBRICATING OILS

· Automotive - Engine oils {Petrol (Gasoline) engine oils and Diesel engine oils}, Automatic transmission fluid, Gearbox fluids, Brake fluids and Hydraulic fluids

· Tractor (one lubricant for all systems) - Universal Tractor Transmission Oil – UTTO and Super Tractor Oil Universal –
STOU – includes engine

· Other motors - 2-stroke engine oils

· Industrial - Hydraulic oils, Air Compressor oils, Gas Compressor oils, Gear oils, Bearing and Circulating System oils, Refrigerator Compressor oils and Steam and Gas Turbine oils

· Aviation - Gas Turbine engine oils and Piston engine oils

Marine - Crosshead Cylinder oils, Crosshead Crankcase oils, Trunk Piston engine oils and Stern Tube lubricant

➤WATERLESS ENGINE COOLANTS

APPLICATIONS

· Land – Performance improvement, reduced maintenance, peace of mind, less risk.

· Sea – Corrosion protection, improved safety & trouble free operations.

· Air – Better performance under extreme operating conditions.

➦FUTURE INDUSTRY OUTLOOK

➥FINANCIALS OF THE COMPANY:

➜QUARTERLY REULTS

➜BALANCE SHEET:

➤KEY RATIOS

➤STOCK CHART

➤SHAREHOLDING PATTERN

➤ CONCLUSION                                                                                                                         

 ➦HEALTHY DIVIDEND PAYOUT(0.93% DIVIDEND YIELD)                                                 ➦COMPANY IS VIRTUALLY DEBT FREE(DEBT TO EQUITY-0.03)➦GROWING SALES (FOR LATEST Q3 FY18 : 24% RISE IN SALES YOY)➦GROWING PROFITS(FOR LATEST Q3 FY18 : 94% RISE IN PROFITS YOY)➦GOOD OPERATING MARGINS⟹VALUATION⟸➧AT CMP OF 1450 RS, I EXPECT COMPANY COULD DELIEVER SALES OF 1814 CR & POST AN EPS OF  80 rs FOR FY17-18.➧HENCEFORTH, FOR FY18-19, COMPANY COULD POST AN EPS OF 170 RS WHICH DISCOUNT THE CMP BY P/E OF 8.5x WHICH IS CONSIDERABLY LOW FOR A COMPANY GROWING AT PACE OF 20-25% CAGR➧THUS STOCK HAS POTENTIAL TO GIVE VERY GOOD RETURNS IN MEDIUM TO LONG TERM INVESTMENTS.

BEEKAY STEEL INDUSTRIES

BEEKAY STEEL INDUSTRIES
CMP- 490 (AS ON 12 JAN 2018)
LISTED ON BSE

Sector:Metals | Industry: Stainless steel

                                       OVERVIEW OF COMPANY

Beekay Steel Industries Ltd manufactures and sells steel products. The Company's products include Sections, Bright Bars, Structurals, TMT Bars and Coil Springs in a variety of specifications and grades.

· Sections- Flats, Rounds, Squares, RCS, Hexagonals, Octagonals & Trapezium

· Bright Bars- Flats, Rounds, Squares & Hexagonals

· Structurals- Angles, Channels, I-Beams & H-Beams

· TMT Bars

· Coil Springs

     >>>>>>>>>>                      The Beekay mills in Jamshedpur, Vishakhapatnam and Chennai produce a variety of standard sections for automotive, railway and engineering industries in 3-6 meters lengths with 10% shorts down to 1 meter or multiple lengths as specified.

Standard Sections - Round Bars, Square Bars, Hexagons, Flat Bars, Round Corner Squares (RCS).

Special Profiles - Rectangular Bars for Aluminum Industries, Crane Rails for overhead EOT, Gantry Crane and Hoists, Fish Plates, Grooved Flats, Taper Flats, Octagons, Hoe Bars, T-Sections, Window Sections.

Special Conditions - Hot Rolled or Normalized, Saw Cut, Machine Straightened, Peeled & Ground or Drawn.

Section Bars range:

Steel Bars	Min. (mm)	Max. (mm)
Rounds	16 mm	220 mm
Flats     width     thickness	20 mm 5 mm	500 mm 20 mm
Squares	16 mm	150
RCS	40 mm	150
Hexagonal	14 mm	85 mm

                                                        

Bright Bars

Bright Bars are cold drawn/ground/peeled plain bars produced from hot rolled plain bars/wire rods. Bright Bars have a smooth and a bright surface with Accurate Tolerance on the dimensions, they possess improved mechanical properties, greater dimensional accuracy, better surface integrity and higher machineability, and these superior product qualities provide a number of significant design advantages & benefits. 

It manufacture Bright Bars in Vishakhapatnam and Chennai units which find application in areas like Pump Shafts, Machined Components, Valves, Dairy Equipments, Fasteners, Machine Tools, Studs, Bolts, Pins, Hinges, Handles, Surgical & Medical Parts, Threaded Bars and other end usages.

The bright bars also find use in Automobile Industry; this is the major sector which consumes Bright Bar. All engine components, Nuts, Bolts, Shafts are made out of special grades of Bright Bars. 

Bright Bars range:

Drawn Bar	Min. (mm)	Max. (mm)		Drawn Bar	Min. (inch)	Max. (inch)
Rounds	14 mm	76 mm		Rounds	5/8”	3”
Flats    ●width     ●thickness	20 mm 5 mm<	100 mm 40 mm		Flats    ●width     ●thickness	3/4" 1/2"	4” 1-1/2”
Squares	14 mm	65 mm		Squares	1/2"	2-1/2”
Hexagonals	12 mm	60 mm		Hexagonals	5/8”	2”

                                                         

STRUCTURALS

Structurals describe hot rolled steel products such as Angles, Channels and Beams. An integral part of construction activity, they give shape and strength to buildings, bridges, transmission line towers (TLT), industrial sheds and structures.

Beekay produces an array of products to meet structural requirements at Vizag and Chennai. This includes Medium & Heavy Angles, Channels and Beams (I-Beams & H-Beams) for infrastructure building. Apart from standard dimensions, customized products can also be rolled for special applications, economically and quickly.

Our Structural Bars range:

Structurals	Min. (mm)	Max. (mm)
Angles	45 x 45 x 6 mm	200 x 200 x 20 mm
Channels	125 x 65 mm	400 x 100 mm
Beams	100 x 50 mm	500 x 180 mm

                                       

                                                TMT BARS

After gaining several years of experience in contract manufacturing for Tata Steel, Beekay has commenced manufacturing of TMT bars under its own brand name BEEKAY TURBO TMT BARS. It is made by the Tempcore process through TurboQuench technology from Germany, these high quality TMT Bars find use in core infrastructure development like construction of multi storey buildings, bridges, dams, railways, power plants as reinforcement material.

Beekay Turbo TMT bars are rolled from Prime Steel Billets as per IS 2830, which ensures uniform physical and mechanical properties. The range varies from 8mm to 40mm, conforming to BIS 1786 - Fe500 & Fe500D.

Advantages

· Better Fire Resistance · Higher Strength and Ductility · Superior Weldability, Bendability and Bonding · Superior Corrosion Resistance · Correct Weight as per ISI Standards                                    COIL SPRINGS COMPRESSION SPRINGS A compression spring is an open-coil helical spring that offers resistance to a compressive force applied axially. Compression springs are usually coiled as a constant-diameter cylinder.  WHO USES THIS PRODUCTS Coil springs are used in a wide range of industrial and consumer markets, including the agricultural, railway, construction, mining, automotive and marine industries. It manufacture all types of hot coiled helical compression springs in various wire sizes ranging from 10 mm dia to 40 mm dia using a variety of alloys that include Spring Steel [Grade 60 Si7], Chrome Moly Steel [Grade 52Cr4Mo2V], SAE 5160 etc. In hot wound springs, It have the capability to meet or exceed commercial tolerances and our spring designers and staff are always prepared to meet new challenges. PRESTIGIOUS CLIENTS 1) Texmaco Ltd. 2) Titagarh Industries Ltd. 3) BESCO Ltd. 4) Braithwate & Co. Ltd. 5) Indian Zonal Railways. THE BELOW FIGURE SHOWS SECTIONS,BRIGHT BARS,STRUCTURALS ,COIL SPRING                                                            INDUSTRY OVERVIEW India overtook Japan as the second-largest producer in 2016, according to data released by the International Stainless Steel Forum (ISSF) at their annual conference held in tokyo, Japan, ISSDA India's stainless steel production rose to 3.32 million tonne for 2017 showing an impressive growth of about 9 per cent over 3 million tonnes in 2017, National Steel Policy released by the Ministry of Steel will give impetus for long term benefits. Increase in exports of stainless steel from India to the world market especially Europe and Americas has established Indian producers capable of producing quality material from their latest state of the art mills meeting stringent quality parameters The long term perspectives for India remain positive. India has been increasingly shifting focus from volume- to value-based production in the past few years. Stimulated by recent lower nickel prices, the country is producing today more 300 series and less low quality 200 and has an increasing share of high quality production than before The steel sector contributes to nearly 2% of the country’s GDP and employs over 6 lakh people.Indian steel demand is expected to grow at 5.4% going forward.It is also one of the largest steel markets which still showed demand growth. Steel imports grew at around 26% during 2016-17, while steel exports declined by about 27%, leading to a decline in the capacity utilization of steel mills in India and a downward pressure on the prices.                            VARIOUS MANUFACTURING UNITS OF THE COMPANY FINANCIALS OF THE COMPANY- CAGR    9 yrs 5 yrs 3 yrs 1 yr Net Sales  11.5% 5.3% 9.5% 38.9% Adjusted EPS  22.3% 14.6% 24.9% 83.9%      STOCK CHART 52 WEEK HIGH - 555 RS 52 WEEK LOW - 114 RS KEY RATIOS - SHAREHOLDING PATTERN CONCLUSION- YOY SALES GREW BY 38% ‌PROFIT CAGR OF 25% FOR LAST 3 YR ‌DEBT TO EQUITY - 0.80 ‌GOOD OPERATING CASH FLOWS ‌REDUCTION IN INTEREST PAYMENT ‌REDUCING DEBT At a cmp of 490 RS, company can achieve sales of 887cr & expecting an eps of 40 for FY 17-18 which is  discounting the current P/E by 12x in the medium term.   Henceforth expecting an eps of 52 for FY 18-19,discounting the current P/E by 9.42x which is very low for such a growth oriented stock making it as a perfect hidden multibagger in long term.