Stock Outlook: Confidence Petroleum India Ltd.

by khalid on 13/09/2011 · 0 comments

 

With a market capitalization of USD 69 million, Confidence Petroleum has been performing much above the expectations in the recent past. Trading at good volumes on the Nifty, the company portrays strong fundamentals. On the financial forefront, the company shows a sound revenue growth of 30% when compared to the previous year’s revenue. Despite this the profits have not shown such impressive growth path. With the present level of project prospects and the company being well established in the LPG segment including the auto LPG provisioning, the fundamentals look strong and provide the stock with a positive bias.

It was the topline rally that has contributed to a 29% growth in the EBIDTA while the EBIDTA margin remained quite flat at around 11%. This is attributed to the rising cost of raw materials that eat up the growth in revenues.

One should not get disappointed by the less than expected performance of the company in the first quarter because as per historical trends, the company grows slowly in quarter one and gradually picks up pace.

The high operating profits were just a vision because on an immediate glance at the interest costs, the bright picture seems to fade out. Earnings per share also stood at 0.5 which was 0.2 lower than previous year.

‘Bell the Bull’ says that the current market price, the stock seems to be rightly valued but seeing the growth prospects of the stock in future, it should not be long before we see it peaking up to Rs. 20 per share on the BSE.

 

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