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ConfidencePetroleumIndiaLtd

BSE:CONFIPET   CONFIDENCE PETROLEUM INDIA LTD
WhyInvestinthisstock • Consistent growth rate and in future growth is expected to increase further. • Simple and predictable business. • • Confidence Petroleum India Limited is one of the leading player in the LPG segment in the Oil & Gas sector. Many state governments are now focusing on Auto LPG as vehicle fuel because of its environment-fr iendly nature. It is more expensive to transport CNG across the country because of its gaseous state (requires pipelines or heavily reinforced tankers) whereas LPG can be easily transported to any corner of the country because of its liquid state (using lighter weight tankers). • T he Sate Govenment of Maharashtra, following similar initiatives taken by the southern states, have called for greener fuel to be used for all public transport. This shall considerably increase the demand for new LPG Pumps accross Maharshtra. • The Company is planning to set up 200 to 220 LPG pumps by FY 2018-19. During the year, the Company relocated around 10 stations with low operations to higher volumes area. Further, the Company has set up a program to convert petrol-run Auto rickshaws into LPGrun ones, which will support its overall volume growth strategy besides helping in reducing pollution. • The branding and marketing activities of the Company has substantially been increased in this segment, which will further give impetus to the Company in the sector • Earlier the GST on domestic LPG for PSU was 5% and for Private players it was 18% but now the goverment in the welcome mode has created a level playing field by allowing 5% GST to Private players also. • Better customer service and quick turnaround in delivery to c ustomers are the key USPs of the company’s business, which in turn is helping them market share from the incumbents. • Though the to take retail LPG cylinder business is a nascent and small business for the Company currently. However, to differentiate itself and provide a valueadded product, the Company recently launched Composite Cylinders under the brand name `Go GAS Elite‘ in this segme nt. This is a national first for any company selling LPG cylinders. The composite cylinders are blastproof, lightweight, and translucent. Company expects to gain market share in the retail segment due to these cylinders over the next few years, and it als o expects these cylinders to provide a better operating margin for the business • In 201718, although the Company had a strong order book from the PSU oil majors, revenues were affected adversely due to lower order offtake during the year. This reduced unit sales from 2.0 million cylinders in 2016- million 2017-18. Company expect that the past bac 17 to 1.7 klog will be cleared during the current financial year, along with adding new orders from the PSUs i.e. Bharat Petroleum Petroleum Corporation Corporation Limited Limited , Hindustan Petroleum Corporation Limited and Indian Oil Corporation limited. • The Pradhanmantri Gram Ujjwala Yojna is also expected to boost this divsion‘s turnover. • The Company aims to set up around 100 LPG Bottling plants over the next t hree years for its own use and for providing filling assistance to PSU Oil Companies. These bottling plants fulfil two key aspects of their business: one, th ey act as storage points for their own Auto LPG pumps, where storage capacity is limited due to city restrictions. Two, they provide filling services for their packed cylinder division. Due to the logistic advantage and cost-efficiency, PSU o il companies prefer availing CPIL LPG Bottling assistance, • The management expects 100500% growth in this vertical in the next three years, which is possible due to their large scale of opera network.
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