Agarwal Ind - Detailed Analysis - Multibagger IDEA

2 Eki 2023

FACT FILE
Company is primarily engaged in the business activities of manufacturing and trading of Petrochemicals (Bitumen and Bituminous Products), logistics of bitumen and liquefied Petroleum Gas and energy generation through Wind Mills

In Budget 2023 Road ministry got a 36% hike in allocation at Rs 2.7 lakh cr for 2023-24,to help the ministry meet the 25,000-km road development target announced in the 2022-23 Budget. This development pace is creating a huge demand for road materials, thereby our responsibilities of catering Bitumen has further increased. The market opportunity is tremendous and we have captured almost 20%-30% of the bulk market share in Bitumen in the private sector. Expecting strong growth in infrastructure activity and based on the current market trend and order pipeline, we have a strong guidance of sustainable long-term growth


The company undertakes transportation activities for itself and for reputed corporates like BPCL, HPCL & IOCL

The company started its shipping activities business in FY20 from its wholly owned subsidiary based UAE
It acquired its first vessel - "BITUMEN PRINCESS" which commenced operations in May 2019. The ship is primarily used to import bitumen from UAE back to India.
Presently, the company has 4 different business segments :-
1. Manufacturing and trading of Bitumen & value added Bituminous Products
2. Co. has large fleet of specialized Bulk Bitumen & LPG Tankers (Logistics)
3. Generates power through wind mills situated in Jaisalmer and Dhulia.
4. Undertaking of various ship/ vessel/ ocean related activities through its wholly owned subsidiary

GROWTH OPPORTUNITIES - FACT FILE
• Rising consumption with increasing Y-o-Y demand creating opportunities for Constant production.
• Bitumen consumption in India is one of the lowest among top 10 countries by road network, creating future growth opportunities.
• India has the second-largest road network in the world at about ~64 lakh kms providing large maintenance opportunities Y-o-Y.
• Large road network compared to vis a vis peers with low bitumen consumption providing opportunities.
• Making India’s growth a reality –
Infra spend on roads and large quantum of repair and maintenance causing demand and recession free growth momentum.

Huge opportunities across business segments
Bitumen will continue to outperform Cement roads.
Safety concerns in concrete roads higher as vehicles likely to slip or slide owning to rain and snow.
Cement roads have high initial cost of construction
Greater maintenance issue as whole slab has to be replaced when roads rupture.
Paving cost for cement roads are higher compared to bitumen roads.
Company has plans to enter into the Bitumen market in North region of India, to increase its customer base and revenue

CONTINUING MARKET LEADERSHIP IN BITUMEN IN INDIA
INDIA’S LARGEST BITUMEN COMPANY IN PRIVATE SECTOR

Eight large bitumen logistic vessels having total capacity of 48550 MT, through our Wholly Owned Subsidiary, AICL Overseas – FZ LLC, which are used in importing raw bitumen from Oil Producing Countries.

Continuous addition of vessels to support Core business FY 2020 1 Vessel with capacity 4750 tons FY 2021 2 Vessels with total Capacity 7400 tons FY 2022 addition of 2 Vessels with total Capacity to 16500 tons FY 2023 addition of 3 Vessels with total Capacity 19900 tons.

Integrated infra-ancillary company focused on bitumen. Market-leading position in bitumen built on presence throughout the supply chain with 8 Bitumen logistcs vessel of 48550 MT. ton of Capacity 650+ Fleet Size Consisting of 350+ Bitumen Tankers & 300+ LPG Tankers

Long Term Target Minimum 3x - Had recommended earlier when it was 640 odd

For more info - Visit my Profile
Regards,
Naresh G
SEBI Reg. RA

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