Equity Watch

Made for Each Other :Bharati Shipyard and Great Offshore,a blue chip in the making

Bharati Shipyard began its operations in 1973,at Ratnagiri.Over the years Bharati has expanded its capacity, capability and product range of its vessels exponentially. The Ratnagiri shipyard, started as a small shop has grown several times during the last 38 years, and is today one of the most advanced shipyards of the company. The yard is now building sophisticated vessels required for the offshore industry including offshore vessels( OSV’s), Multipurpose support vessels(MSV’s),Plateform Supply Vessels( PSV’s), Anchor handling cum Tugs cum Supply Vessels ( AHTS’s) etc.The quality, size and the level of sophistication of the vessels built by Bharati has also grown manifold.

In 2010 , Bharati Shipyard took over Great Offshore , prominent integrated offshore oilfield services provider offering a broad spectrum of services to upstream oil and gas producers  to carry out offshore exploration and production (E&P) activities.This gave  forward integration to Bharati Shipyard.The resultant union is expected to make Bharati Shipyard  an all weather company .

During the last year , the combined entity has achieved top line of more than Rs. 2300 crores and PAT of more than 210 crores.This has neen achieved  inspite of the most difficult market conditions.Combined EPS is close to Rs. 30..Revenues and PAT are going to take a quantum jump in the years to come.

Inspite of all the positives for Bharati Shipyard, market cap. of the company is just about Rs. 400 crores at CMP of Rs. 130, which is very very low.Some vested interests are trying to spread rumours ( read here) and sensing the low share price, promoters are buying to the maximum permissible limit.Also the company continues to be on Inorganic Growth path with latest acquitition of Temba,  from ICICI Ventures.This nullifies all the rumours that promoters want to exit .Even if they decide to exit , the price will be in 4 figures and not 3.

Buy is recommended at CMP of Rs. 130 for a 2 year HOLD..

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


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