Nitin asks about ~ Tide Water Oil yet solid at Rs 6750 while Shree Renuka Sugars at Rs 25+ has disappointed greatly and eroded by 70% with continuing micro and macro industry woes

Nitin  asks about ~ Tide Water Oil (TWO) at Rs 6750 and Shree Renuka Sugars (SRS)at Rs 25+ at subdued Sensex and Nifty levels of sub 16200 and 4900 respectively 

My Views on these two Scrips are contrasting….. TWO continues to be solid despite some margin stress,while SRS has disappointed greatly and eroded by 70% with continuing micro and macro industry woes and struggles to service high Debt and regain significant lost ground  in the share price

TWO @ Rs 6750 (FV Rs 10)

Standalone Networth at March 31,2012 is Rs 308 crs with Equity low at Rs 87 lakhs (FV Rs 10) giving a Book of @ Rs 3500 per share and thus a P/BV just below 2…Has no Bonus History but has just announced doubling of Dividend from last year => Rs 120/ share  => 1200% => 1.77% yeild…will involve Rs 10.45 crs and this is  yet below 20% of PAT payout

Standalone PAT has dropped yoy from Rs 64 crs to Rs 59 crs as Cost of raw materials consumed has moved sharply up to 69% of Net Sales from 63%….Though Selling & Marketing Costs have shown a significant decline it is largely offset by the jump in other expenses

Nearly all of the Networth  =>Rs 292 crs is the Capital Deployed in the Core Business of Oil and Grease,leaving little scope for Other Income Generation through Investments …Standalone EPS has dropped yoy to Rs 678  (consolidated is yet lower at Rs 665 after considering two Veedol subs) from Rs 736….Price Earning Multiples hover around 10

Market Cap is @ Rs 600 crs while Net FY 12 Sales were @ Rs 800 crs

The 52 Week Share Price range is Rs 8540 and Rs 5676

Government PSU Andrew Yule holds 228390 shares of TWO =>26.22% of the Equity => worth @ Rs 150 crs at CMP of Rs 6750…A few years ago Andrew Yule had approached the Government to allow it to sell the TWO Stake to help it recover….it then withdrew this request as it began to recover in it’s operations and was able to raise funds  without resorting to the sales of TWO Shares

There are @ 12500 TWO Shareholders,but none is a FII…Apart from Andrew Yule,the other significant holdings are with LIC (4.22%),United Insurance (10.04%) and a few Body Corporates  like Victory Retail Marketing (4.61%) and Standard Greases & Specialities (23.24%,that’s higher than even Andrew Yule Holding))…TWO Employee Welfare Trust holds 2.57% with a current value of @ Rs 15 crs => half of annual Employee benefit expenses of @ Rs 30 crs read more