Equity Watch

Gulf Oil Corp. – to demerge its Industrial Explosives division and also get into Property Development

Gulf Oil Corp. The Company is part of the international Hinduja Group and has diversified business interests. The current business activities of the 50 year young Company are in 1) Lubricants, 2)Industrial Explosives,3) Mining & Infrastructure Services, and 4)Property Development. The Company operates through 4 major divisions with independent management structures.

On 4th Oct 2010 the company has announced that it has demerged its Industrial Explosives Division and the Latest AR talks about the Property Development :

Property Development at Bangalore has now started as the demand for properties has revived. Thedevelopment of 5.05 mn sq.ft. is being taken up and will cover hotel, retail outlets, commercial malls andserviced apartments. The construction work at Bangalore will commence in the current year. Further work onthe Hyderabad property was held up due to the 100 ft. connector road being fi nalised by the GHMC. This issue has recently been resolved and architectural work and development has commenced

Estimated value of land bank is anywhere between 473 Cr. to Rs. 1800 Cr. THIS IS AS PER THE AUDITORS NOTE 27 OF SCHEDULE 18 IN THE LATEST AR 2009-10..REPRODUCED BELOW :

27. Land meant for property development situated at Bengaluru and Hyderabad had been revalued as at 31st March,2008, based on a valuation by an approved valuer. The resultant surplus on such revaluation amounting toRs. 183,896.69 Lakhs( RS. 1838 CRORES VS. MARKET CAP. OF JUST 1000 CRORES FOR ALL THE 4 BUSINESSES) had been credited to Revaluation Reserve in the previous years. In view of steep recession inthe realty sector, management has reassessed the valuation of the aforesaid properties as on 31st March, 2009 and based on the guidelines issued by the Registration and Stamps Department of Karnataka & Andhra Pradesh, the value of the subject lands has been reassessed and, the resultant surplus on revaluation amounted to Rs. 43799.82Lakhs.(438CR) The resultant write down aggregating to Rs. 140096.87 Lakhs (1400CR) has, in accordance with the requirement ofAccounting Standard-10 Accounting for Fixed assets been debited to Revaluation Reserve in the previous year.During the year, the Company has entered into Agreement to Sell 4.75 acres of land to IDL Speciality ChemicalsLimited. Since the aforesaid parcel of land is no longer meant for Property development, an amount of Rs. 1950.87Lakhs has been withdrawn from Revaluation Reserve.

Buy is recommended for long term..

This report has been prepared solely for information purposes and the information contained herein may not be deemed to be an investment advice. Such information is impersonal and not tailored to the investment needs of any specific person. The information contained herein is not a complete analysis of every material fact representing any company, industry or security. The views expressed may change. While the information contained herein has been obtained from sources believed to be reliable, no responsibility (or liability) is accepted for the accuracy of its contents. Investors are advised to satisfy themselves before making any investments and should consult with and rely upon their own advisors whether and how to use such information in making any investment decision. Neither the author nor his firm accepts any liability arising out of use of the above information

Standard

4 thoughts on “Gulf Oil Corp. – to demerge its Industrial Explosives division and also get into Property Development

  1. Sunil Biyani says:

    Ashok Sir,
    I am a big fan of yours, for the last few months. I keep visiting your website for discovering these gems in the market.

    After reading one of your recommendations, I happened to buy Ashco Niulabs a few months back. Bought 1 Lac shares at 1Re. Now it has reverse split. I dont understand what mess they are creating by first splitting and now reverse splitting.

    Can you give your views on this? I am patient enough to wait, but if the company’s outlook is looking shaky (especially from the management side), it would be a waste of time on it. It looked as if, they did the reverse split just for that ADR/GDR (something that they did for Rs.1.35).

    Like

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