The Sensex has once again crossed the 61,000 points mark and one has to search for value in this market. Here is a small cap that has fallen and offers good value at the current levels.
Gulf Oil Lubricants: good Financial performance
The stock of Gulf Oil Lubricants has dropped from levels of Rs 827 to the current price of Rs 459. However, fundamentally nothing much has changed for the company.
Gulf Oil Lubricants is a leading player in the auto lubricants and industrial lubricants segment. The company reported a good healthy growth for the quarter ending Sept 30, 2021. In fact, the revenues were placed at Rs. 533.52 crores, a QoQ growth of 28% and YoY growth of 30%.
The net profits were placed at Rs. 58.70 crores, a QoQ growth of 93%. Overall, the company did well in the second quarter ending Sept 30, 2021.
Gulf Oil Lubricants: Strong growth
The company grew in double digits in Commercial Vehicle Oil segment where it undertook strong marketing initiatives and also in the higher margin Passenger Car Motor Oil segment as urban centres started showing increasing traffic in a return back to normalcy.
The company also showed very strong growth in the Industrial segment with major growth coming from Auto Ancillary, Engineering, Metal, Cement and Construction segment customers.
Gulf Oil Lubricants also started a new ad lube section in Chennai, which would boost revenues in the coming quarters. It has also tied up with a division of Larsen &Toubro to supply lubricants.
Buy the stock of Gulf Oil Lubricants for long-term
Overall, the company achieved an EPS of Rs 11.66 for the period ending Sept 30, 2021. If we annualize the same, the company can do an EPS of Rs 45 this year. This means the stock is trading at a p/e of just 10 times. The stock is also available at a dividend yield of 3.5%.
The company also has low equity and a high promoting holding, which should augur well.
Overall, we believe that as economic growth gathers momentum, we should see the stock of Gulf Oil doing well in the coming days, as it largely remains under valued. The stock of Gulf Oil Lubricants last ended at Rs 459 on the NSE.
Greynium Information Technologies and the author are not liable for any losses caused as a result of decisions based on the article. Investing in equities is risky. Invest only if you have an appetite for risk. The author and his family do not own shares of Gulf Oil Lubricants.