ANDHRA PETRO

The Andhra Petrochemicals Ltd.   (APL)   was promoted by     The Andhra Pradesh Industrial Development Corporation   (APIDC)   and   The Andhra Sugars Ltd.   (ASL)   in   1984 as joint sector Company.    Subsequently the structure of the Company has changed into an assisted sector.     
     
APL was established with a licence capacity to produce   30,000   MTPA of Oxoalcohols at Visakhapatnam,     


PRODUCTS


The company manufactures OXO-ALCOHOLS and has a market share of around 27% with balance demand met by imports .


FINANCIALS


EQUITY AROUND 85 CRORES
DEBT AS ON MARCH09    14 CRORES
MARKET CAP 110 CRORES


YEAR        MAR05    MAR06     MAR07     MAR08      MAR09    SEP09(6M)
SALES       230           225           309             281             245           98
NP              11               2              36              36             16           0.81


The business was satisfactory until September, 2008 after which the global meltdown has affected it as well. After considerable impact during the quarter October-December, 2008 markets have recovered partly during the quarter January-March, 2009. The signs of Economic recovery is expected to further improve the prospects of Oxo-Alcohols business in future.


EXPANSION



The Optimisation and Modernisation of the existing facilities thereby increasing the installed capacity of the Plant to 73,000 MTPA was undertaken by the company and has been completed in Oct-Nov09 and the plant has been shut down temporarily to assimilate new capacities.

The best thing about this company is the level of debt since almost five years, d/e ratio has come down from 0.6 to 0.08 in March 09.

Even in the June and Sep quarters of 09, the interest payment has not risen significantly. Hence the expansion seems to be funded entirely through internal accruals.



TECHNICALS


The stock made a high of 42 in Jan08 and along with the market fell down and created a low of around 8 in march 09 and then rallied along with the market to register a high of 19.5 in June 09 and currently consolidating between 12 and 14.

Cmp is around 12-13.



THIS STOCK IS FOR THE HIGH RISK HIGH RETURN KIND OF INVESTOR BECAUSE IF THE EXPANDED CAPACITIES ARE USED TO MAXIMUM, THEN THE SALES AND PROFITABILITY OF THE COMPANY WILL WITNESS GOOD GROWTH AND STOCK PRICES COULD FOLLOW SUIT.

Here is the company's announcement regarding plant shutdown for integration of expanded capacity. Probably means there would be no production for two months.

"Andhra Petrochemicals Ltd has informed BSE that the Company has been implementing Modernisation - cum - Optimisation of its Oxo-Alcohols Plant, thereby enhancing the production capacity from the present 39,000 MTPA to 73,000 MTPA. Modernisation - cum - Optimisation of the Plant requires the shut-down of the existing Plant for integrating new facilities with the existing facilities. The Company this integration may take around two months during which period the mechanical completion of the Project shall be achieved, followed by commissioning of the Expansion Plant. In view of this, the Plant will be shut-down from November 11, 2009."

Maybe a good time for punters to accumulate stock bcos not much expected in terms of next quarter financial results?

Andhra Petro is consolidating above its 200 dema at around 13.9. today it has broken out of a falling wedge formation and currently around 14.5.

On the charts, stock looks good for further upsides.

Originally posted by hit2710 Andhra Petro is consolidating above its 200 dema at around 13.9. today it has broken out of a falling wedge formation and currently around 14.5. On the charts, stock looks good for further upsides.

In follow up to the above update, the stock has broken out of falling wedge pattern with good volumes, and last week gave a close at around 16 near the high for the week.

The stock has consolidated above its 200 dema around 13.90 for many sessions and after that this upmove has happened and seems to be a good buy on declines if there are any near the 14-15 levels. Going forward the 14 levels should offer strong support.

Chart pattern is of multibagger. If the fundamentals about the expansion benefits kicking in play out in next 6-12 months, this could be a stock to watch out for.