Saturday 7 March 2015

Gas supply issue of Gujarat Borosil

One reader has highlighted the problem faced by Gujarat Borosil of reduced supply of Gas from Gail as it has to import high cost LNG/CNG.

Yes, this gas issue was a concern since last year. This year for first nine months, total power cost is 17 cr for a turnover of Rs. 107 cr, last year it was 13 cr for 96 cr….not much difference though. But this is going to fall by big margin because of the recent fall in oil prices. Internationally Gas prices are linked with oil and unlike oil (OPEC) there is no such producers’ cartel to control the supply side of the game. LNG prices skyrocketed last year in asia due to strong demand from japan due to closing of many nuclear plants and strong demand across the region. But now Japan is reopening some of its nuclear plants again, growth of china is not going to be that much high, huge supply of Gas/LNG is coming in the market from Australia and Brazil, China is also investing big for shale gas and any success in this will bring more gas into the market.


In the short to medium term, prices of gas will be low as most of the producers has already committed the huge investments and till they are getting their operating costs they will produce gas. But huge emphasis worldwide on renewable energy means that we won’t see historical high prices of gas back again. As per latest estimates, Indian LNG prices will be around $9.5 in first quarter of 2015 as compared to $20/15 last year. I think Gujarat Borosil will be able to counter this Gas issue.
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15 comments:

  1. Mahesh Spiritual8 March 2015 at 08:57

    Thanks for your reply Sir.
    With Regards.

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  2. Anonymous20 March 2015 at 10:00

    Gud morning sir g.........me hune hune suru kita hai share market ch invest karna. Planning to buy gujarat borosil. Ki kehne ho le layie ja wait kariye????? Regards..

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    Replies
    1. Gurpreet singh20 March 2015 at 20:53

      Dear Sir, kindly append your name in future. Gujarat Borosil is a risky stock. So unless you are having 5-6 good high quality moderate risky stocks in your portfolio, Gujarat Borosil will not serve the purpose. its performance depends upon too many factors which are beyond its control for most of the part...although nothing wrong with the company...Regards

      Delete
    2. sridhar3 July 2015 at 00:27

      Hi Gurpreet

      Could you please explain if G.Borosil is impacted in the following situations.

      1. The anti dumping duties are not in place for solar panels as the ministry of finance/power was not agreed last year , we are importing it from china etc. So, understand that the cell manufacturers like Indo solar and moserbear will be impacted. But will this impact G.Borosil too? (My understanding is that module will comprise of everything,however, Solar panels is a group of solar cells connect together on a board (Excluding Box & glass).So the glass can be bought here which is needed during installation.) I actually didn't quite get whether the whole set is imported or only a part of it.
      2. As per AR 2014 , management didn't take any capacity expansions on the low glass segment and concentrating more on patterned glass.
      In-case of demand , they are actually loosing time as the competition from other countries is flowing into India now. Whats ur opinion on this.
      3. The FBR technology will be used for energy efficiency in purifying silicon. Which means Silicon wafers will be less expensive going forward. Does this mean it impacts low iron glass usage as the imports will be less costlier?
      4. Today there is an article in MMB on the impact of solar cell producers in India because of lacking technology and cost of production in comparison with foreign players. This seems to be unviable for glass making company.
      5. The preference shares issued in 2012 with 9% cumulative dividend don't dilute the equity.Couple of months ago,we have the same kind of announcement too.Could you help me understand whether these transactions are different OR linked to each other. The current debt of 40 Cr (2014) +90 crores too ,correct? Because these are issued at Rs.100,either the price of stock should be somewhere near to 100
      and not sure what I am missing here as the stock is trading around 20.
      6. From AR "The continued pressure to quote lower prices for electricity in the biddings to get Government allocations is leading to lower prices for input/component manufacturers thereby making them vulnerable which will affect health of the Industry". Please help in explaining what it is being referred to as Quoting lower prices helps manufacturers and shouldn't affect the industry , is that right

      Thanks & Regards
      Sridhar

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    3. sridhar10 July 2015 at 09:37

      Hi Gurpreet , Could u please reply if you get a chance . Thanks!

      Delete
    4. Gurpreet singh10 July 2015 at 10:44

      Yes Dear...by today evening....Our audit is almost complete...

      Delete
    5. sridhar10 July 2015 at 12:41

      No problem . Thats great .

      Delete
    6. Gurpreet singh14 July 2015 at 23:21

      Dear Sir, reply posted in a separate Post.

      Delete
  3. vishal.28 March 2015 at 08:34

    i have started accumulating gujarat borosil from rs 26 till 21..now it is @20. How much do u suggest is a good holding period

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    Replies
    1. Gurpreet singh28 March 2015 at 22:06

      Dear Sir, There is nothing wrong with the stock, your entry price or anything else. The thing that matter is that it should not consume the major chunk of your portfolio. We are not buying it for 50-60% gain but for 5-10 times. So these minor variations don't matter much....i am also holding it from 25/- and will buy more at 20 or so.
      It is a concept stock and currently clouded by many uncertainties like Chinese import, demand for solar power etc. which will take some time to clear out...so i'll hold it for fairy long period of time...minimum 2-3 years.

      Delete
  4. Anonymous8 June 2015 at 22:53

    Sir, your view on Piccadily Agro Inds Limited

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    Replies
    1. Gurpreet singh10 June 2015 at 21:55

      No study dear...but better to stay away from this. These type of promising stories keep running forever and suddenly in bull market like this they start performing brilliantly in one quarter only to wipe out the brilliance in another. Penetrating the indian liquor sector is not that easy...which is transforming into premium from "desi daru". Any sugar company can make alcohol from molasses and then local liquor....but there are hundreds like these and all are struggling...so nothing different here...Avoid

      Delete
  5. Mohan Gajula3 February 2017 at 16:03

    Hello Gurpreet, Lanco Solar Pvt. Ltd, Subsidiary of Lanco Infratech started setting up a plant in Chhatisgarh that will manufacture "Polysilicon" key material required to make solar cells, this is going to be first company to do so In India, current share price of Lanco Infratech is 4/- financials are not in good shape, future can be good, should we buy and keep shares of this company?

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    Replies
    1. Gurpreet singh4 February 2017 at 00:13

      Hi Dear, thanks for the update. I am never a follower of Lanco group. I can't see how with the debt of more than 40000 cr they have the courage to venture into another risky venture. It can be from the house of Tata...not from Lanco. But i'll look into the news and will come back.

      Regards

      Delete
    2. Mohan Gajula4 February 2017 at 10:57

      Thanks...would look forward for your inputs.

      Delete

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