Cairn India - a good buy

Cairn India is the fourth largest oil and gas exploration and production company in India and has a working interest in 14 blocks. Two of these are currently producing hydrocarbons. Cairn India is focused on creating shareholder value by developing its world class resource base in Rajasthan and seeks to continue with its track record of exploration success. Cairn India’s portfolio is fostered in both mature and frontier areas, as well as in regions and basins where the current data set can be optimised or reinterpreted.


Operations 

Cairn India has two processing plants, 11 platforms, 200km of sub-sea pipelines and operations spanning the Indian continent. The company operates the largest producing oil field in the Indian private sector and has pioneered the use of cutting-edge technology to extend production life. Three of the fields – Ravva, Lakshmi and Gauri – are already producing more than 80,000 barrels of oil equivalent per day (boepd) on behalf of Cairn and its joint venture (JV) partners. 

In Rajasthan Cairn India has made 23 discoveries including some of the biggest finds in the last two decade. 

Cairn India has maintained a low operating cost base through efficient operations. Part of its strategy, the Company’s has focused on life-cycle planning and continuous monitoring and control of operational costs as well as applying innovative operating concepts and technologies. 

Cairn India sells its oil to four major refineries across India and its gas to both public and private buyers.


According to production plans, in the third quarter of 2009, output from Mangala fields will begin, which will be transported through trucks. By the fourth quarter, the company expects to increase the crude output to 50,000 barrels a day and transport crude through its pipeline network (from Barmer to Gujarat coast).




Recent News :


MRPL has been appointed as the buyer of the initial crude oil and state-run refiner Indian Oil Corporation (IOC) would take the crude once volumes rise.

Cairn will initially produce 4,000 to 5,000 barrels of oil per day from its fields in Barmer district of Rajasthan which would be transported in trucks to Kandla on Gujarat coast for onward shipment to Mangalore.Output from the Mangala field, the first of the three fields Cairn is putting to production, would rise to 30,000 barrels per day (1.5 million tonnes) in July-September.

The Mangala field is expected to produce 30,000 bpd by the second quarter of 2009-10. Production is then expected to ramp up to 80,000 bpd by the end of 2009 before reaching a plateau of 1,25,000 bpd during H1 of 2010.

Besides 1,25,000 bpd of Mangala, the adjacent Bhagyam field would produce 40,000 bpd and Aishwariya another 20,000 bpd. The peak of 1,75,000 bpd would be reached in 2011. Cairn is investing $850 million in a processing facility and another $940 million in a heated oil pipeline from the fields to the port of Viramgam in Gujarat.

Cairn India, the subsidiary of UK-based Cairn Energy, holds a 70% stake and is the operator of the Rajasthan block. ONGC is its partner with a 30% stake.

Financials :

Cairn India Ltd reported a consolidated net profit of Rs236.42 crore in the quarter ended 31 December 2008 as compared to a loss of Rs13.91 crore in the year-ago period.The net profit included one-time reversal of deferred tax liability amounting to Rs123.60 crore.

The consolidated profit before tax for the fourth quarter of 2008 was Rs169.37 crore as opposed to Rs20.52 crore in the October-December quarter of 2007.


2009 Year HIGH 201

2009 Year LOW 142

CMP : 199


Investors having long term view can invest in this stock on dips (150-170) for a good return in the medium term.

Supply Chain Management

Supply Chain Management :

One of the most important challenge in organized retail in India is faced by poor supply chain and logistics management. The importance can be understood by the fact that the logistics management cost component in India is as high as 7% -10% against the global average of 4% - 5% of the to,tal retail price. Therefore, the margins in the retail sector can be improved by 3% - 5% by just improving the supply chain and logistics management.

In India, with demand for end-to-end logistics solutions far outstripping supply, the logistics market for organised retail is pegged at $50 million and is growing at 16%. It is expected to reach $120-$130 million by 2010. Organised retail on the other hand is growing at 400% and is expected to reach around $30 billion by 2010.

Arshiya International Ltd

Arshiya International Ltd is a global supply chain and logistics infrastructure solutions company and is listed on the BSE. The company is an amalgamation of several strategic verticals (Free Trade Warehousing Zones {FTWZ’s}, Rail, 3PL, 4PL, Trucking, Warehousing & IT) enabling unparalleled operational expertise & solution capability across the entire supply chain spectrum & value chain. Arshiya has additionally developed strong ground operational capability (including Trucking & Warehousing) in the Middle-East, intended to be linked by sea from Mumbai, India to Sohar, Oman & Dubai, UAE.

Arshiya's key business entities currently include: Arshiya Logistics {which provides shipping and global logistics (3PL) services to its customers under the flagship BDP}, Arshiya Demand Chain Management {focusing exclusively on India's rapidly expanding retail market for their entire supply/demand chain (4PL) management in partnership with Global Major, Genco}, Arshiya Logistics Infrastructure (focusing on building Free Trade Warehousing Zones in India & the Middle East) Arshiya Rail Infrastructure (with 75 rakes set to become the largest pan-India private container rail operator by 2010) Arshiya Technology (under the flagship ‘Cyberlog’ which provides global I.T systems, software development and business process outsourcing services in the Supply Chain space) and Arshiya's Knowledge Center (which will encompass specialized consulting & training services).

GROUP COMPANIES

Arshiya Logistics Infrastructure

Arshiya Infrastructure focuses on establishing stable, high-tech and interconnected logistics infrastructure under project Diamond and Emerald in India and Middle East respectively.

Arshiya Logistics Infrastructure -Free Trade and Warehousing Zones:

Arshiya’s FTWZs would be a special category of Special Economic Zones (SEZ) with a focus on trading and warehousing. The units located within the FTWZ would thus be provided with significant benefits as available to the units in SEZ. These FTWZs would emerge out as an Integrated Zone to be used as International Trading Hubs with inbuilt Container Freight Station, Warehousing space and Inland Container Depots with attached Empty Container Storage & Refurbishment Yard. Concept of FTWZ has been coined to provide much needed infrastructure support for trading, storage and value added activities related to foreign trade along with multi-modal transportation, easy foreign exchange transaction, one stop custom clearance and to avail the regulatory benefits of FTWZs like exemption from taxes and duties.

Arshiya Logistics Infrastructure - India

West & North India, Free Trade Warehousing Zone (FTWZ) as Hubs and Rail network across Pan India (Phase 1).Project Diamond including the Indian Sub-Continent (FTWZ, as Hubs with all types of warehousing and CFS/ICD at all locations in West, North, East, South and Central India with Spokes on the rail corridors) connecting the main ports and hinterland of the India sub - continent with a rail / road (last mile connectivity) network (to be fully commissioned by end 2012) (Phase 2).

Arshiya Logistics Infrastructure Middle East

FTWZ in Sohar, Oman (Phase 1).
Project Emerald (FTWZ as Hub and Spokes all over Middle East Region) connecting the Sohar FTWZ with the main freight centers of Middle East (to be fully commissioned by mid 2012) (Phase 2).

BDP India and Middle East

BDP India and Middle East are entities within the Arshiya Group and are affiliated with BDP International, one of the leading global logistics companies. BDP International, headquartered in the United States has a network of offices and affiliates spanning 140 countries and representing a customer base of leading fortune 500 companies with advanced technology, BDP provides visibility across the global supply chain.

Within India, BDP has expanded to 9 offices across the sub-continent providing a full scope of logistics services to its clients. Logistics operations include import and export services across the globe, freight forwarding, ocean and air transportation, trucking, project logistics, and supply chain management.

BDP Middle East has offices in UAE, Qatar and Oman and is rapidly expanding across the Middle East region. Covering the samefull scope of services as BDP India, BDP Middle East can support its clients in the movement of products across the globe. In addition to its menu of core services, a special project logistics team of experts has been created to support the growth of major Infrastructure development within the region.

Cyberlog Technologies

Cyberlog provides an integrated supply chain solution to manage the logistics of demand fulfillment, customised technology services and business process outsourcing services.
Cyber-SCM, a supply chain solution, is a suite of web native applications for enterprises and logistics service providers. The completely integrated application helps to manage the logistics of demand fulfillment seamlessly across all geographies and transport modes, thereby reducing costs, stock levels, and cycle time while satisfying the need for on-time delivery.

Genco India:

Genco India is a joint venture company providing unique 4PL“Demand Chain Management” services designed to enhance customer’s competitive advantage in the retail sector. Genco is one of the leading retail logistics companies in North America, specializing in “forward and reverse logistics”, and provides customized logistics activities to many of the largest retail stores and consumer brand companies across a wide range of product segments.

Activities include supply chain analytics and network design, neutral benchmarking, 4PL logistics execution for product distribution across India and reverse logistics, providing a single point of contact for information visibility and KPI management, and ultimately assisting customers to re-design their operations from a traditional logistics model to a dynamic demand chain which responds to changing consumer needs.

Arshiya Rail Infrastructure:

Arshiya Rail Infrastructure, a wholly owned subsidiary of Arshiya International has commenced phase I of its rail operations as of 02 February 2009.

Arshiya Rail initiated its pan-India rail operations with the deployment of its first of the planned 30 rakes in phase 1 for Vedanta Aluminium. Arshiya Rail Infrastructure is providing unique and customised rail solutions with innovative and industry / product specific designed containers for large corporations with sizeable evacuation requirements in India.

Recent News:

Arshiya’s free trade zone in Khurja

Arshiya International Ltd, a global supply chain and logistics infrastructure solutions company, has received the formal approval from the Board of Approval (BoA) of SEZs (Special Economic Zones) for setting up its Free Trade and Warehousing Zone (FTWZ) in Khurja (UP).
Arshiya’s FTWZ in Khurja is coming up in the heart of the manufacturing hub in the NCR and is the second of the five FTWZs being set up by the company at different locations in the country. Arshiya’s first FTWZ at Mumbai received BoA clearance in December last year. It is expected to be the first operational FTWZ and is to be commissioned by September 2009.

Stock Details:

Q3 Financials:

Net Income for Q3FY09 at Rs. 114.16 crore, up 9%
EBITDA for Q3FY09 at Rs. 17.38 crore, up 31%
Net Profit for Q3FY09 at Rs. 13.02 crore, up 25%
Nine Months Ended (FY09) Net Income at Rs. 405.67 crore, up 49%
Nine Months Ended (FY09) EBITDA at Rs. 60.97 crore, up 87%
Nine Months Ended (FY09) Net Profit at Rs. 52.34 crore, up 105%

BSE Stock Code: 506074

Share Price: 49.8 as on 24 March 2009

Face Value : 2

Year High Low
2009 86.5 42.55
2008 424 69.2

At Current Market price it is a buy for Medium to LongTerm.

A good company with solid preformance

Shiv-Vani Oil and Gas Exploration Services Ltd.

Incorporated in 1989, Shiv-Vani has rapidly evolved to emerge as a key player in the upstream sector of the hydrocarbon industry. It went public in 1993. Headquartered in New Delhi, the company offers a wide spectrum of services in the field of oil and natural gas exploration and production. It provides short-hole drilling services to ONGC and it is globally recognized for its proven expertise in exploration, production and allied services. It provides a complete suite of onshore activities and offshore operations. It is the only integrated CBM (Coal Bed Methane) services provider in India and successfully pioneered horizontal and directional drilling in the country to enhance CBM procurement.

Investment Positives

Shiv-Vani is the biggest private sector rig owner & operator in India specializing in onshore and offshore operations. It has 21 onshore rigs, four seismic data acquisition equipment; four crew boats; seven compressors; 233 drilling rigs and 425 logistic support vehicles. It is one of the few companies in India to own an onshore rig equipped with Top Drive System.

It has an order book of 4800 crs, out of which 4100 crs is executable over a three-year period.

Rise in the prices of rig in the coming years will help the company to earn more revenues in its contracts as it has acquired rigs at lower prices.

Current Market Price : 102

Investment Period : 3-5 years
A good company with solid performance.

The Art of Investing

"Manage the downside; the upside will take care of itself" - Donald Trump
Investing is an art but most of the retail investors fails to master it. Investing is not simply putting your money somewhere with the aim of get-rich -quick attitude. It requires a lot of planning and control on your personal finance.

Investing is not gambling. A ‘real’ investor does not simply throw his hard earned money randomly. It requires lot of research analysis and time. It is smarter to buy and hold good stocks then to engage in day trading.

There are several methods available for investors.Investing in Bank Deposits,Term Deposits and Bonds are much safer investment in times like the market is in sever down trend . But we failed to include the effects of inflation in our returns, after taking the inflation effect the investor hardly earn 4-5 % return. This kind of investment are safe for investors who wants to protect their money with a small portion of appreciation. But for the investor who wants to create wealth for his generation, stock market provides an excellent opportunity to build wealth over a period of time.

How to find stocks that fit's your need?

By The Size: Large cap companies are well established and stable.But this companies have limited growth penitential then small cap companies. In case of small cap companies which operative in niche sectors can give good return.But the problem will come when these companies expanding in to new areas.
Growth Vs Value Companies:

A growth company is one that expanding in faster phase with regards to their earnings against unfavourable market condition or economy. If you are smart enough to catch a successful growth company in their early stage, you can create a huge wealth. A ‘ Value’ company is in general trade lower that the average earning due to economic condition.

The first sign of an growth company is constantly increasing it's market share against all odds and they are in emerging or niche sectors. The "sector" in which these companies are also plays a vital role in choosing growth and value companies.

Sectors to watch
Insurance : Huge Potential but most of the companies unlisted
Health Care : India is favorite for cost effective medical treatments
Food Processing : Huge untapped market
Alternate Energy: Yet to take off