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LORD JESUS CHRIST SAYS

“The thief cometh not, but for to steal, and to kill, and to destroy: I am come that they might have life, and that they might have it more abundantly. I am the good shepherd: the good shepherd giveth his life for the sheep.” Jesus Christ, John 10:10-11

23 Dec 2018

STOCK MARKET--AN UN IDENTIFIED SHARE FOR INVESTMENT/Confidence petroleum


             

Hello Friends,

I have come across a company called CONFIDENCE Petroleum. The company has significant presence in the LPG/CNG Energy. The company has primarily dealing in four sectors:


1: CYLINDER MANUFACTURING (core business):

Function: From more than last two decades with cylinder manufacturing as its core activity. Launched a new type of product in the name of go gas elite.

Features of go gas elite: BLAST PROOF, LIGHT WEIGHT (about half of weight than metal cylinders) , Translucent Visibility, Elegant Design,EASY handling etc.
Major clients: PSU like Indian Oil, Hindustan petroleum, Bharat petroleum and Private players.



Capacity of manufacturing: Company has 15 manufacturing facility at various locations in India like Nagpur(4 units in this region),Mumbai, Gujrat, Hyderabad, Jalpaigudi, Baazpur, Jharkhand . Cylinder manufacturing capacity of the group is 5 million cylinders per annum


2: Auto LPG Dispensing Station (ALDS):In the name of GO Gas Auto LPG Stations
Function: Auto LPG Dispensing Station. Today GO Gas Auto LPG Stations are available in Maharashtra, Karnataka, Tamil Nadu, Telangana, Andhra Pradesh, Gujrat, Rajasthan, West Bengal, Madhya Pradesh, Uttar Pradesh
CAPACITY:CURRENTLY COMPANY HAS 112 LPG DISPENCING STATIONS AS PER Q22018 PRESENTATIONS.


3: BOTTLING: India’s largest Private Sector LPG bottler in India.

Major clients: Actively providing Bottling assistance to Oil major PSUs Indian Oil, Bharat Petroleum, Indian oil etc.

Capacity/PLANTS: 58 POTILLING PLANTS in 19 states .


4: Packed Cylinder Division:
Franchise model: Also they are inviting people to open their own gas agency under the name of Go Gas (350 dealers available in India)
Note: Not posted anything on financials of the company as I m new in investing and researching on that front . Not invested.

Please share ur views.

If anything I have written wrong please correct me.

Thanks and regards

ANOTHER CUSTOMER REVIEW.

There are a few good points about their product Gogas Elite. It is made of ‘Composite’ material viz; is broadly plastic. This makes the cylinders very light and even better - blast proof. The inner capsule is translucent which helps to gauge the volume of gas present in the cylinder. The technology is advanced compared to the steel cylinders both in safety feature parameters and portability, YouTube has couple of videos on this product and the promoters.

Much will depend on the rollout capabilities of the promotors and distribution channel. As there is no govt. subsidy there is a price disadvantage vis - a -vis the PSU distributors. Since availability of cooking gas is the biggest headache, in my opinion, most householders will not mind the price differential. According to the MD of the company the 2 kg cylinders could be stocked by retailers provided the total capacity at the shop does not exceed 100kgs. This is a sweet spot if just a normal KYC is needed to make a purchase every time you run out of gas.

The Gas station business is dependent on government regulations making it mandatory for auto rickshaws to switch to LPG. Otherwise, the demand will be slow.
The bottling plants numbering more than 50 appears to receive steady order from the oil and gas PSUs and provides steady cash flow.

My concern is about the company’s dividend record and capex cycle. Also, could not find much information about procurement arrangement of gas from Middle East.


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