Aban Loyd - Digging Black Gold
Printed From: The Equity Desk
Category: Investment Ideas - Creating winning portfolios!
Forum Name: Stock Synopsis
Forum Discription: A bried discussion of companies on very specific matters. Normally this is the prelude for further research as always members would be discussing quality companies with good management only
URL: http://www.theequitydesk.com/forum/forum_posts.asp?TID=979
Printed Date: 18/Apr/2025 at 8:47am
Topic: Aban Loyd - Digging Black Gold
Posted By: smartcat
Subject: Aban Loyd - Digging Black Gold
Date Posted: 13/Jun/2007 at 1:18pm
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Aban Loyd is the 10th largest offshore drilling company in the world (after its $1 billion plus Sinvest acquisition). They have 11 drilling assets (rigs, support ships etc) and 9 more will be delivered in the next 2 years. http://www.indiaearnings.com/sub_india/compnews.php?autono=285399 - Merril Lynch came out with a report on Aban Loyd recently - they expect its net profits to go up by 18 times in the next 3 years. Sharekhan expects it to close FY07 with a net profit of Rs. 112 crores but consolidated FY09 net profit is expected to be Rs. 1,400 crores. That's why you see Aban Loyd trading at 120 PE.
Opportunities:
- Thanks to high crude prices, oil companies are flush with funds and they are expected to continue paying top dollar for drilling rigs. Rates can go as high as $400,000 per day (depending on the features of the rigs).
- Because everbody wants to drill, demand for rigs outstrips the supply world over. Rig-building shipyards' like Hyundai's order books are booked till FY09. Supply might come in only after FY10. Till then, Aban Loyd should enjoy high rates for their rigs.
- Sinvest (Norway) alone should contribute $800 million in revenues by FY09 (Source: Emkay Research)
Threats:
- Rupee appreciation could lower Aban Loyd's profits
- Aban Loyd has over $1 billion in debt on its books (to finance the purchase of Sinvest)
- Indian companies like RIL and ONGC are planning to purchase their own rigs rather than depend on companies like Aban Loyd.
- Reduction in exploration activity could reduce the 'per day' billing rates of Aban Loyd.
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Replies:
Posted By: PKB2000
Date Posted: 13/Jun/2007 at 2:08pm
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"And the stock has run up quite a few in past few days" ------------- I am always doing that which I cannot do, in order that I may learn how to do it. ~Pablo Picasso |
Posted By: smartcat
Date Posted: 13/Jun/2007 at 3:13pm
| That's an understatement. In the last 3 years, the stock has gone up by thirty times (30 bagger). |
Posted By: Vivek Sukhani
Date Posted: 13/Jun/2007 at 3:28pm
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Another wonderful wealth creator, Aban Lloyd.......I think Indian companies in the exploration sector will get directly into this space......a very very potent threat....
Dredging is one area which will also become a very serious area in the days to come....can someone throw any light which companies in India manufactures trawlers and dredging equipment
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Posted By: smartcat
Date Posted: 13/Jun/2007 at 3:34pm
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Note: Aban Loyd is not a manufacturer of these ships/rigs. They get it from somewhere else and lease it to E&P companies. If you want to enter the manufacturing space, you might want to take a look at Bharati Shipyard.
Dredging Corporation of India has a fleet of ships for dredging, but then again, they don't manufacture it.
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Posted By: Vivek Sukhani
Date Posted: 13/Jun/2007 at 3:56pm
| I know Aban is not a manufacturer..... |
Posted By: smartcat
Date Posted: 24/Jul/2007 at 12:51pm
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Nothing to do with Aban in particular, but consolidation is happening in the offshore drilling industry.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aJlUmdCXUXkU&refer=home - Transocean to Acquire GlobalSantaFe for $17 Billion
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Posted By: smartcat
Date Posted: 14/Sep/2007 at 7:08pm
http://indiaearnings.moneycontrol.com/sub_india/compnews.php?autono=303199 - Buy Aban Offshore, target Rs 3530: Citigroup
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Posted By: kulman
Date Posted: 17/Sep/2007 at 12:18pm
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http://www.business-standard.com/common/storypage_c_online.php?leftnm=11&bKeyFlag=IN&autono=27628 - Aban Offshore has received firm orders from ONGC for the deployment of three rigs - Aban III, Aban IV and Aban V - for a period of three years each following the completion of their existing contracts with ONGC. According to a release issued by Aban to the BSE today, the operating day rate for each contract is $1,56,600, and the total value of the contract is approximately Rs 2,000 crore ------------- Life can only be understood backwards—but it must be lived forwards |
Posted By: xbox
Date Posted: 17/Sep/2007 at 12:21pm
Hey Ram!!. .Ye jamana kuch dard bholne nahe deta 
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Posted By: smartcat
Date Posted: 17/Sep/2007 at 12:21pm
| Charges per day can go up to $400,000 for the rigs. No wonder senior Ambani wants to build the rigs himself rather than pay this kind of money. |
Posted By: kulman
Date Posted: 17/Sep/2007 at 12:27pm
Hmmm....is there a facility under SEBI regulation wherein stock portfolios could be swapped? ------------- Life can only be understood backwards—but it must be lived forwards |
Posted By: smartcat
Date Posted: 17/Sep/2007 at 12:36pm
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I can give you my Aban Loyd shares, but I'm giving them away only as a 'combo offer' with my HFCL, Silverline and DSQ Software shares. |
Posted By: kulman
Date Posted: 17/Sep/2007 at 12:44pm
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........but I'm giving them away only as a 'combo offer' with my HFCL, Silverline and DSQ Software shares.
----------------------------------------------------------
 ha ha ha ha That's a cracker...really is!!
 ------------- Life can only be understood backwards—but it must be lived forwards |
Posted By: s_praharaj
Date Posted: 18/Sep/2007 at 11:59pm
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smart cat, Nice joke,
It reminds me of a joke I heard sometime back.
Once Laloo Yadav declared that he has a solution to Kashmir problem.
He was deputed by Vajpayee to Musharaff to make the deal.
Laloo met Musharaff and in minutes both of them came out, and Musharaff announced that, he is not interested in Kashmir and let it stay with India.
Vajpayee was totally aghast, he took Laloo to a corner and asked him, "What you told Musharaff, that he immediately agreed to give up Kashmir ?".
Laloo said, "Its simple, I told him, Take one, Get one free. You take kashmir, but you have to take Bihar for free." ------------- Shashi Praharaj |
Posted By: kulman
Date Posted: 18/Sep/2007 at 1:12am
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Yes Shashi jee....nice one on Laloo, Bihar & Kashmir.
------------- Life can only be understood backwards—but it must be lived forwards |
Posted By: smartcat
Date Posted: 09/Oct/2007 at 1:56am
Aban Loyd should remain in my portfolio till more supply (rigs) come in to the market. But since all the shipyards have a huge backlog of orders, it might take 2 - 3 years for this supply to come in and for the billing rates to go down.
Regarding valuations, Aban Loyd (CMP: Rs. 3,600) is currently trading at 12 times FY09E consolidated earnings - which seems to be the norm for the global rig companies. However, because of new rig acquisitions that will come in over the next few years, Aban Loyd should see a staggering growth in EPS.
From Emkay Research's report -
FYO8E EPS: Rs. 117
FY09E EPS: Rs. 274
FY10E EPS: Rs. 383
With this kind of growth rate, I have a stock price "target" of Rs. 9,000 in another 2 years (based on the assumption that Aban will trade at trailing P/E of 20 like all the global companies, after the growth slows down in the later years).
Globally, drilling companies have grown to massive size. Transocean has a market cap of $32 billion while Diamond Offshore (USA) has a market cap of $13 billion. If the management makes the right moves and govt continues with its NELP policy, Aban Loyd will become big - it's current market cap is only $3 billion.
As I pointed out elsewhere, the only concern with Aban Loyd is it's debt to equity ratio of 20:1. If crude oil falls to $50, global E&P activities will slowdown (because companies won't have large amounts to spend on E&P activity) and reduce the demand for the rigs. That will really mess up the growth calculations.
So by investing in Aban, we are basically taking a bullish call on crude oil prices. I read an article somewhere that as long as crude stays above $60, there would be demand for exploration and production activity.
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Posted By: PKB2000
Date Posted: 09/Oct/2007 at 2:50am
Thank you Sir ------------- I am always doing that which I cannot do, in order that I may learn how to do it. ~Pablo Picasso |
Posted By: PKB2000
Date Posted: 10/Oct/2007 at 5:54pm
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For this stock to move, we need to do some egging on..
You drill Aban, drill,drill.drill and fetch more more more!
Sorry Sir for Hijacking your words ------------- I am always doing that which I cannot do, in order that I may learn how to do it. ~Pablo Picasso |
Posted By: smartcat
Date Posted: 12/Oct/2007 at 6:14pm
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http://indiaearnings.moneycontrol.com/sub_india/compnews.php?autono=307785 - Aban Offshore Q2 net profit up at Rs 47.2 cr
http://www.moneycontrol.com/india/news/recommendations/buy-aban-offshore:-emkay/307754 - Buy Aban Offshore: Emkay
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Posted By: PKB2000
Date Posted: 13/Oct/2007 at 1:49pm
If I ask you if one wants to buy more ABAN then what to sell from following four
1) POWER GRID
2) TITAN
3) ICSA
4) INFOEDGE
Do you have any comment on this!
------------- I am always doing that which I cannot do, in order that I may learn how to do it. ~Pablo Picasso |
Posted By: deveshkayal
Date Posted: 13/Oct/2007 at 3:17pm
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Dada, i would sell Info Edge.
Will Aban Offshore declare stock-split ?? ------------- "You don't need to be a rocket scientist. Investing is not a game where the guy with the 160 IQ beat the guy with a 130 IQ. Rationality is essential"- Warren Buffett |
Posted By: smartcat
Date Posted: 13/Oct/2007 at 3:39pm
I like it when stock prices are like Rs. 4,000 or Rs. 6,000. That will keep most of the speculators/short-term traders away.
And I like these Kaun Banega Multibaggerpati questions.
Starting off with the 50:50 option, I would keep InfoEdge and Titan - since they are 'new economy' stocks, which could give high returns but are associated with higher risks.
Now which stock to sell - Power Grid or ICSA? You should go for Phone a Friend option - get advice from somebody who knows the power sector. But I beleive that Power Grid would be a 'slow grower'.
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Posted By: kulman
Date Posted: 13/Oct/2007 at 3:43pm
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try "Audience Poll" .....if still confused....just FLIP the question. ------------- Life can only be understood backwards—but it must be lived forwards |
Posted By: PKB2000
Date Posted: 13/Oct/2007 at 5:29pm
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Sir jis(devesh & Smart cat) Thanks for your suggestions
Kulmandada
I thought it is better to wait and observe. Not to buy anything neither to sell anything at this point of time.
Rather I will stick to my strategy to buy some Larsen or some BHEL whenever I am confused with others.
------------- I am always doing that which I cannot do, in order that I may learn how to do it. ~Pablo Picasso |
Posted By: smartcat
Date Posted: 13/Oct/2007 at 10:47pm
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What is this PKB Sir? You enquire the whole week about my new sports car but now you say that you would rather buy the Ambassador car?
You looked under the bonnet (fundamentals), checked out its performance (stock price performance) and after-sales service (future prospects). Is there something wrong with my gaadi?
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Posted By: PKB2000
Date Posted: 13/Oct/2007 at 11:40pm
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Well smart cat sir
Many thinks for giving me a chance to use the sports car. I have kept my sports car very safely in well covered condition.
But you know I can use Ambassador safely and bravely,I get it serviced from any local boy in trouble . Besides it has little wider space. there are lots of friends of my daughter to whom I need to give some lift time to time. For them Ambassador is the best! So for additional buying Ambassador is the better option! ------------- I am always doing that which I cannot do, in order that I may learn how to do it. ~Pablo Picasso |
Posted By: smartcat
Date Posted: 13/Oct/2007 at 11:55pm
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My dad had an Ambassador car long time back. Me and my 2 brothers could play football at the back, while we were being driven around. Wonderful car, great memories!
From Sharekhan.com report on Aban Loyd:
Key financials (consolidated)
Particuars FY06 FY07 FY08E FY09E FY10E
Net profit (Rs cr) 71.6 -50.2 420.6 1506.5 1947.8 Shares in issue (cr) 3.7 3.8 3.8 3.8 3.8 EPS (Rs) 19.4 -13.0 109.3 391.4 506.0 % y-o-y growth - - - 258.2 29.3 PER (x) 206.5 -307.5 36.7 10.2 7.9 Book value (Rs) 116.8 138.0 243.3 630.6 1132.7 P/BV (Rs) 34.3 29.1 16.5 6.4 3.5 EV/EBIDTA (x) 38.9 45.9 11.8 6.0 4.7 RoCE (%) 15.2 4.7 12.1 23.2 26.5 RoNW (%) 25.3 -7.1 60.4 90.9 58.1 My eyes are fixated on the estimated net profit for FY10.
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Posted By: basant
Date Posted: 13/Oct/2007 at 12:00pm
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Hang on! Are you sure of these EPS estimates? In that case this stock could go up another 4 times in 2 years.Look at their RONW! ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: smartcat
Date Posted: 13/Oct/2007 at 12:07pm
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Is there an article on TED where I can read about RoNW and how it will affect the stock price/company performance? I know what it stands for, but don't know what I'm supposed to learn from this number. Is RoNW something that we should look at when evaluating asset-based companies?
Yes, there are estimated consolidated EPS numbers. The results that were declared on Friday were standalone numbers. Aban has not declared the Sinvest's (100% subsidiary) results yet.
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Posted By: PKB2000
Date Posted: 13/Oct/2007 at 12:52pm
Smart cat sir
I am not swiming in ABAN fluid only for one week. Sir, look back and find that I am the second person to talk something on your first writing on ABAN. I like swiming (even in this old age and fat body) and gradually I understand from you that swiming in OIL(ed) water is easier than in pure water! ------------- I am always doing that which I cannot do, in order that I may learn how to do it. ~Pablo Picasso |
Posted By: shivkumar
Date Posted: 13/Oct/2007 at 8:38am
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punters on aban and other oil stocks may please read www.debka.com the intelligence website from israel. it has regular stories on the situation in the middle east. what if the US attacks Iran and countries like syria and the hamas retaliate by striking israel. the grapevine has it that oil prices will shoot up even more. there will be more demand for cos like aban, but there will be other downsides like a big crash in the market. right now aban's balance sheet shows the company is floating on hopes.... |
Posted By: basant
Date Posted: 13/Oct/2007 at 8:44am
RoNW is the same as RoE sometimes we refer to the Net worth as equity. We keep playing the http://www.theequitydesk.com/forum/forum_posts.asp?TID=119 - RoE and RoCE. factor like a broken record!
------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: deepinsight
Date Posted: 13/Oct/2007 at 11:24am
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Did we discuss huge debt/leaverage that the company employs? (am not sure if it was Aban or another company)
One has to be worried about very high level of debt/leaverge that any company employs. Great ROE's till some unforseen event may suddenly change things for the company.
Any thoughts? ------------- "Investing is simple, but not easy." - Warren Buffet |
Posted By: basant
Date Posted: 14/Oct/2007 at 12:05pm
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That is why RoE shoudl be looked at in conjuction with RoCE. Can never fiddle with the RoCE while RoE can be jacked up by using debt. ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: smartcat
Date Posted: 14/Oct/2007 at 12:33pm
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Aban will be listing its 100% subsidiary - Aban Singapore (which in turn owns a few rigs and 100% of Sinvest, Norway) in the Singapore Stock Exchange. Aban hopes to raise http://economictimes.indiatimes.com/Markets/IPOs/Aban_unit_plans_400_mn_Singapore_IPO/rssarticleshow/2357433.cms - something like $400 million - this should give some relief to the balance sheet. By the way, there is a huge discrepancy between EPS estimates of Sharekhan (Rs. 109, 391, 506 for FY08, 09, 10) and Emkay (Rs. 117, 274, 383 for FY08, 09, 10). Looks like Sharekhan is ignoring the equity dilution possibility. But the management has probably given a guidance of Rs. 1,800 crores net profit for FY10 - so all brokerages including Citigroup/Merrill Lynch are carrying this number.
No need to pray for a War in Middle East or a hurricane to strike USA. All one needs to do is keep track of the prices at which rigs are rented out. If rig contracts are re-negotiated at higher price, things are going well. Else, it might be the right time to bail out of the stock.
Borrowing from the movie Matrix -
Hope. It is the quintessential human delusion, simultaneously the source of our greatest strength and our greatest weakness.
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Posted By: smartcat
Date Posted: 23/Oct/2007 at 12:47pm
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From Khandwala Securities research report on Aban Loyd -
- Mar 2008 target price of Rs. 4,735
- Consolidated expected PAT growth of 200% over next 2 years
- Demand for rigs will peak in 2010.
- Debt to equity ratio will go down from 20:1 to 3:1 in the next 3 years because of future cash flows.
- Owns 20 drilling rigs (Great Offshore, in comparison, owns 2)
Financial Summary:
FY2006 FY2007 FY2008E FY2009E FY2010E Sales (Rs. Cr) 490 718 1,499 3,171 4,132 Net Profit (Rs. Cr) 82 (34) 527 1,659 2,039 Basic EPS (Rs.) 22.35 (9.34) 143.28 450.87 554.28 P/Ex 179.21 (429.12) 27.96 8.89 7.23 |
Posted By: smartcat
Date Posted: 02/Nov/2007 at 3:34pm
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Aban will be able to raise $500 million for only http://www.aban.com/abanoffshore/news_details.aspx?id=22 - 13% of Aban Singapore . That means the Singapore subsidiary alone is valued at $3.8 billion (Rs. 15,000 crores). The current market cap of Aban Offshore is just Rs. 19,000 crores.
This means, Aban Offshore's India operations, which owns 5 rigs (I think) is available at just Rs. 4,000 crores.
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Posted By: tigershark
Date Posted: 02/Nov/2007 at 4:32pm
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so still avery valuable co even at this price, what yu say boss? ------------- understanding both the power of compound return and the difficulty getting it is the heart and soul of understanding a lot of things |
Posted By: smartcat
Date Posted: 02/Nov/2007 at 4:39pm
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Absolutely. And suddenly investors seem to be taking notice - even Dalaal Street Magazine has come out with a small article on Aban. The stock is up 5 times in the past 12 months. So where will it go from here? My guess is Rs. 9,000 to 10,000 per share - that's 20 times FY10 estimated earnings. That's when I plan to get out of it. Because after 2010, there might be an increased supply of offshore rigs, which might depress the earnings of drilling companies.
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Posted By: vivek.650
Date Posted: 02/Nov/2007 at 4:43pm
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Sir, Aban lloyd would be priced 25000+ within 2008.It is sure winner all the way.Thanks. ------------- vivek |
Posted By: tigershark
Date Posted: 02/Nov/2007 at 4:48pm
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smartcat one imp question does aban post consolidated results orare they standalone, in other words r sinvest and aban singapore results included in this sept results.aban stock price tracks global crude prices. ------------- understanding both the power of compound return and the difficulty getting it is the heart and soul of understanding a lot of things |
Posted By: smartcat
Date Posted: 02/Nov/2007 at 4:55pm
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um Vivek. At Rs. 25,000 per share, Aban would trade at a market cap of $25 billion. It is unlikely you will see this at 25k soon.
Doc, these are standalone results. Aban comes out with consolidated results at the end of the financial year. But after Aban Singapore listing, we should be able to get a consolidated results picture through news reports.
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Posted By: deepinsight
Date Posted: 02/Nov/2007 at 6:38pm
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smartcatjee:
Have to say the balance sheet scared me to invest in the company, This company has executed without missing a beat. Congratulations on your rewards for holding. (high risk high reward
 )------------- "Investing is simple, but not easy." - Warren Buffet |
Posted By: smartcat
Date Posted: 02/Nov/2007 at 12:25pm
I get scared when I see the balance sheet of ANY company. That's why I base my investment decisions purely on hearsay, gossip, tips and rumours. 
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Posted By: deepinsight
Date Posted: 02/Nov/2007 at 8:55am
that inverted logic seems to be working  for you. lage raho!------------- "Investing is simple, but not easy." - Warren Buffet |
Posted By: Vivek Sukhani
Date Posted: 02/Nov/2007 at 9:38am
| smartcat, your sense of rumour is perhaps one of the deadliest I have come across. If you ever take the interview of Shri Shri nautankilal, that will be the perfect recipe for quality entertainment. Even Sarabhai vs. Sarabhai will have to compete hard with that sort of entertainment |
Posted By: tigershark
Date Posted: 03/Nov/2007 at 3:59pm
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us recession in08? us demand for crude slows, china and other asian economies heavily exporting to us also slow, us dollar surprisingly rises--history shows that,---crude comes off the boil.---crude related stocks also cool off-----this senario could be a possible risk to be kept in mind ------------- understanding both the power of compound return and the difficulty getting it is the heart and soul of understanding a lot of things |
Posted By: PKB2000
Date Posted: 05/Nov/2007 at 5:55pm
I have no other option but to invest based on the above style (probably) and today again I re-entered in this stock! ------------- I am always doing that which I cannot do, in order that I may learn how to do it. ~Pablo Picasso |
Posted By: India_Bull
Date Posted: 05/Nov/2007 at 5:10am
When I was buying you were selling and now its your turn ??  ------------- India_Bull forever Bull ! www.kapilcomedynights.com |
Posted By: smartcat
Date Posted: 05/Nov/2007 at 11:20am
| Gentlemen, Aban is not 'Gaav Ki Chameli'. Please treat her with respect - she is for keeps. |
Posted By: rider.royal
Date Posted: 06/Nov/2007 at 12:15pm
Nice quote smartcat, is gaanv ki chameli pe dil aa gaya hai... . |
Posted By: PKB2000
Date Posted: 06/Nov/2007 at 4:28pm
Admin - please take care about this post - This may disturb the peace of married people! ------------- I am always doing that which I cannot do, in order that I may learn how to do it. ~Pablo Picasso |
Posted By: PKB2000
Date Posted: 06/Nov/2007 at 4:44pm
Yeh Andar ka baat hay (TED family matter!) ------------- I am always doing that which I cannot do, in order that I may learn how to do it. ~Pablo Picasso |
Posted By: muralimohan001
Date Posted: 06/Nov/2007 at 7:39pm
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English please.......... ------------- If money is your hope for independence, you will never have it. The only real security that a man can have in this world is a reserve of knowledge, experience and ability. |
Posted By: smartcat
Date Posted: 12/Nov/2007 at 11:32pm
Economic Times article on allied oil & gas industries - http://economictimes.indiatimes.com/Oil__Gas/New__RigVeda/articleshow/2533977.cms - New Rig Veda
There is also a small note about http://www.theequitydesk.com/forum/forum_posts.asp?TID=1274 - Shiv Vani -
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Posted By: deveshkayal
Date Posted: 12/Nov/2007 at 9:26am
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CVCI has a great track record of spotting multibaggers. For example: Suzlon, KS Oils, IVRCL !!! ------------- "You don't need to be a rocket scientist. Investing is not a game where the guy with the 160 IQ beat the guy with a 130 IQ. Rationality is essential"- Warren Buffett |
Posted By: basant
Date Posted: 12/Nov/2007 at 9:54am
They are also invested here:
http://www.nseindia.com/marketinfo/companyinfo/eod/Shareholding/shareholding_public1.jsp?nds_id=5797&symbol=CENTBOP&count_string=0%7C16%7C6%7C1%7C1%7C0%7C0%7C0%7C7%7C&as_on_dt=30-SEP-2007 - http://www.nseindia.com/marketinfo/companyinfo/eod/Shareholding/shareholding_public1.jsp?nds_id=5797&symbol=CENTBOP&count_string=0%7C16%7C6%7C1%7C1%7C0%7C0%7C0%7C7%7C&as_on_dt=30-SEP-2007 ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: kanagala
Date Posted: 12/Nov/2007 at 10:02am
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I am looking for some information about shiva-vani with comparison to Aban. Both of them are recommended by Sharekhan. They recommended Aban very very early days. They are good at covering this oil and gas sector. They are spot on most of the stocks in this sector.
------------- While one person hesitates because he feels inferior, the other is busy making mistakes and becoming superior. |
Posted By: smartcat
Date Posted: 12/Nov/2007 at 11:01am
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I agree. Sharekhan is covering lots of other companies in this allied oil/gas sector. But Aban (offshore drilling) and Shiv Vani (onshore drilling) seems to be the best bets. The rest of the companies are too small, and won't have the advantage of scale and size.
http://indiaearnings.moneycontrol.com/sub_india/compnews.php?autono=312519 - Aban Offsore an outperformer; target of Rs 6000: Macquire
I like Macquire's reports - they are very comprehensive and nicely written. Anybody has a copy of this?
Jayakumar on Aban Offshore in the http://www.moneycontrol.com/india/news/market-outlook/caution-moderationvery-importantthis-mkt-experts/312353/1 - Samvat 2064 discussion with RJ/Shankar
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Posted By: MPD05
Date Posted: 13/Nov/2007 at 4:28pm
I fully agree with this observation. Recently, they took a large position in a very small technology company ... Intense Technologies. Any one track this one? |
Posted By: nikhil090
Date Posted: 13/Nov/2007 at 11:00pm
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take a look at himadri chemicals - CVCI has 14% stake there. http://www.nseindia.com/marketinfo/companyinfo/eod/Shareholding/shareholding_public1.jsp?nds_id=6082&symbol=HCIL&count_string=15%7C4%7C9%7C0%7C0%7C0%7C0%7C0%7C0%7C&as_on_dt=30-SEP-2007 - http://www.nseindia.com/marketinfo/companyinfo/eod/Shareholding/shareholding_public1.jsp?nds_id=6082&symbol=HCIL&count_string=15%7C4%7C9%7C0%7C0%7C0%7C0%7C0%7C0%7C&as_on_dt=30-SEP-2007 recently the stock has run up by more than 50%
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Posted By: shivkumar
Date Posted: 13/Nov/2007 at 11:50pm
| Are there any chartists here who can tell us when Himadri will start falling so we can pick up some chips at more affordable levels? |
Posted By: smartcat
Date Posted: 15/Nov/2007 at 4:11pm
http://www.moneycontrol.com/india/news/recommendations/aban-offshore-an-outperformer,-target-rs-6152:-anandrathi/313099 - Aban Offshore an outperformer, target Rs 6152: AnandRathi
Target of 6152? These guys are amazing - they give a target up to the last decimal point.
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Posted By: PKB2000
Date Posted: 21/Nov/2007 at 10:33am
------------- I am always doing that which I cannot do, in order that I may learn how to do it. ~Pablo Picasso |
Posted By: deveshkayal
Date Posted: 23/Nov/2007 at 9:57am
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DSP Merrill Lynch has downgraded Aban Offshore to neutral from buy, citing expensive valuations. “Though we have upgraded our DCF-based fair value to Rs 3,502/share, the revised fair value is 25% below Aban’s market price. It is also no longer the cheapest stock now. It is more expensive than most US offshore drillers,” the note said. “Our fair value calculation assumes its rig fleet size remains unchanged at 21, which is a conservative assumption in light of Aban’s growth track record. In view of its large debt, there may however be no more acquisitions until end FY09,” the note added. ------------- "You don't need to be a rocket scientist. Investing is not a game where the guy with the 160 IQ beat the guy with a 130 IQ. Rationality is essential"- Warren Buffett |
Posted By: PKB2000
Date Posted: 24/Nov/2007 at 12:40pm
Good news for me at least, as soon as it comes nearer to the value mentioned by DSPML I will collect it for future. I am eager to increase the percentage at any cost!
Here I will opt for the option opposite to my regular investment process. ------------- I am always doing that which I cannot do, in order that I may learn how to do it. ~Pablo Picasso |
Posted By: shivkumar
Date Posted: 24/Nov/2007 at 3:35pm
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why not take a look at Garware Offshore. They are catching up fast. They are buying rigs and the next few months will see several rigs being deployed along India's coast. |
Posted By: smartcat
Date Posted: 24/Nov/2007 at 4:22pm
| This is new - massively divergent target prices from 2 foreign brokerages. Macquaire's target is almost double that of Merrill Lynch. |
Posted By: India_Bull
Date Posted: 28/Nov/2007 at 1:31am
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Murmanskaya heading for Roc's Chinese wells
The rig is expected to commence drilling in the offshore permit from mid-December. The first two wells will test the Wei 6-12-West and Wei 6-12-East structural-stratigraphic prospects located 2.5 kilometres (1.5 miles) and 1.7 kilometres (1 mile), respectively, from the 2006 Wei 6-12-South oil discovery. Murmanskaya is expected to spend about 100 to 160 days drilling on four firm wells and possibly two more optional wells in Block 22/12. Roc Oil holds a 40 per cent stake in the permit. Partners are: Horizon Oil Ltd. with 30 per cent interest, Petsec Petroleum Inc. with 25 per cent interest and Oil Australia Pty Ltd. with five per cent interest. ------------- India_Bull forever Bull ! www.kapilcomedynights.com |
Posted By: PKB2000
Date Posted: 29/Nov/2007 at 4:03pm
I would like to know the sell target price set by DSPML to 3600 is really what they feel or it should be 4600.00. 3600 is just a printing mistake!
What do you think sir? ------------- I am always doing that which I cannot do, in order that I may learn how to do it. ~Pablo Picasso |
Posted By: smartcat
Date Posted: 29/Nov/2007 at 4:09pm
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I think ML is trying to say that the current market price should be around Rs. 3,600 by DCF valuation using the formula -  I think DCF valuation technique should be banned in all 175 countries. This formula is never fair to my stocks.
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Posted By: basant
Date Posted: 29/Nov/2007 at 4:16pm
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I have never applied these sigmas and expressions and always flip over the page where these calculations are indicated in any brokerage report.Basically it serves no additional purpose then to indiacte that the author of the report has undergone rigorous formal education! ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: BGKGURU
Date Posted: 29/Nov/2007 at 4:20pm
| hahahaha well said |
Posted By: smartcat
Date Posted: 29/Nov/2007 at 4:21pm
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The little Nazi symbol type thingie is called 'Sigma'? In school, I was always wondering what it actually does. That, and the 'integral' symbol -  PKB Sir, if I use the above formula, Aban Offshore will be at Rs. 10,000 in another 2 - 2.5 years.
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Posted By: kulman
Date Posted: 29/Nov/2007 at 5:07pm
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PKB Sir, if I use the above formula, Aban Offshore will be at Rs. 10,000 in another 2 - 2.5 years.
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My calculator says that the target would be achieved within 22˝ Months. But there will huge supply & hence selling pressure around Rs. 9,980
------------- Life can only be understood backwards—but it must be lived forwards |
Posted By: smartcat
Date Posted: 29/Nov/2007 at 5:13pm
And this, coming from a Gentleman, whose school Math teacher quit her job after trying to teach you how to add 2 and 2!
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Posted By: kulman
Date Posted: 29/Nov/2007 at 5:19pm
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.......whose school Math teacher quit her job after trying to teach you how to add 2 and 2!
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Ha ha ha.........how do you know? She had later migrated to Mysore & tried to commit suicide there due to more difficult student!
Having said that, don't you feel that I've more authority to talk about stock price targets with the advantage of not knowing how to add 2+2 ?
------------- Life can only be understood backwards—but it must be lived forwards |
Posted By: deveshkayal
Date Posted: 29/Nov/2007 at 6:21pm
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ML has been proved wrong again and again on their Pantaloon call. ------------- "You don't need to be a rocket scientist. Investing is not a game where the guy with the 160 IQ beat the guy with a 130 IQ. Rationality is essential"- Warren Buffett |
Posted By: PKB2000
Date Posted: 30/Nov/2007 at 3:33am
As per follwoing logic of Fourier transform
 I calculate that 1.5% in my present position is good enough
My astrologer tells that huge selling pressure is there in this financial year in the stock as there is a more cold wave followed by hot summer and then winter thereafter rain, so chances that one may get a little cough in digging oil now!
The best time may be to increase another 1.5% in next year. Anyway your calculation and mine both confirms that the stock will be doubled at least in some day! ------------- I am always doing that which I cannot do, in order that I may learn how to do it. ~Pablo Picasso |
Posted By: kulman
Date Posted: 30/Nov/2007 at 9:37am
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Ha ha ha.....Dada....bhaalo !!! ------------- Life can only be understood backwards—but it must be lived forwards |
Posted By: deveshkayal
Date Posted: 09/Dec/2007 at 10:17am
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CITI raises target to 5895
We are increasing our target price to Rs5,895 from Rs3,830 as we switch to a DCF-based valuation approach. DCF, in our view, best captures the true earnings potential of Aban's assets through the whole cycle, i.e. allowing for the strong nearer-term cash flows to be tempered to factor in lower, mid-cycle earnings beyond FY10E, when Aban's earnings will peak.
Increasing FY08-09E earnings by 1-12% — We have increased our FY08E-09E earnings to factor in new contract wins as well as higher than earlier anticipated rates for some of the contracts coming up for re-pricing. We are adjusting our earnings for FY10E by 3%, from when we factor in a decline in day rates tending towards mid-cycle levels.
Catalysts: (1) upcoming listing of the Singapore subsidiary; (2) repricing of assets (drillship Frontier Ice, semi-sub Bulford Dolphin, jackup Deep Driller; (3) asset acquisitions. Risks: (1) slowdown in offshore services growth, (2) downturn in jackup day rates, (3) delivery delays.
The outlook for the sector remains solid, with continued strength in fundamentals. Not only are rig utilisation and day rates healthy, but also the current jackups and semisubs on order account for only 19% and 27% of the global fleet – levels we find manageable considering the more advanced drilling requirements of operators and the ageing global fleet. With the stock having declined ~13% from its recent highs, we maintain our rating. ------------- "You don't need to be a rocket scientist. Investing is not a game where the guy with the 160 IQ beat the guy with a 130 IQ. Rationality is essential"- Warren Buffett |
Posted By: smartcat
Date Posted: 09/Dec/2007 at 11:00am
Target of 5900? Now I kinda like this DCF valuation approach 
Beyond FY10, there should be a big increase in the supply of rigs. Post FY10, I expect companies like Aban to trade at about 20 times trailing earnings.
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Posted By: PKB2000
Date Posted: 10/Dec/2007 at 12:08pm
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CITI seems to be very expert in making news in the CITY ------------- I am always doing that which I cannot do, in order that I may learn how to do it. ~Pablo Picasso |
Posted By: vijayM
Date Posted: 22/Dec/2007 at 2:30pm
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As per my study ABAN offshore has a PEG of 0.13 CMP 4600 and shree cement of 0.18 at CMP of 1350. The PEG is based on Mar09 estimated earnings. I feel these are potential multibaggers. regards vijayM
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Posted By: basant
Date Posted: 22/Dec/2007 at 2:53pm
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My limited experience tells me that we should take the long term sustainable growth rate and any growth above 30pc - 40pc is unsustainable in the long run. ------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: smartcat
Date Posted: 08/Jan/2008 at 4:31pm
http://www.moneycontrol.com/india/news/pressmarket/care-reaffirms-rtg-assigned-to-aban-offshore/320134 - CARE reaffirms ratings assigned to Aban Offshore
Aban is the only large company that I know of that has a debt to equity ratio of 20:1. But CARE has now assigned a 'low credit risk' to Aban. I wonder if this means they'll be able to take on more debt at low interest rates - to buy more assets (drilling rigs).
The $500 million Singapore IPO & cash flows of Rs. 2000 crores in FY10 should help in reducing the debt a bit.
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Posted By: smartcat
Date Posted: 16/Jan/2008 at 3:32pm
http://indiaearnings.moneycontrol.com/sub_india/compnews.php?autono=321197 - Aban Offshore Q3 net profit up at Rs 47.7 cr
http://www.moneycontrol.com/india/news/recommendations/buy-aban-offshore,-target-rs-5420:-sharekhan/321540 - Buy Aban Offshore, target Rs 5420: Sharekhan
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Posted By: Ajith
Date Posted: 16/Jan/2008 at 4:20pm
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Aban,so long as there is an acute shortage of rigs it is undervalued at current price because they bought rigs before the boom ,taking on debt. My cousin was lucky having bought it at a really throwaway price some years ago on a tip-off.(and he has not sold any shares for several years now) I feel the cycle will turn at some point but this is an industry in which industry players worldwide have not been aggressive unlike Aban so we cannot say when. ------------- Ajith |
Posted By: smartcat
Date Posted: 16/Jan/2008 at 4:34pm
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Another article mentioned that deep water rigs are going at day rates $750,000 to $1 million. That's a cool Rs. 4 crores added to the topline everyday (with OPMs of 60% and above). Payback time for investment in rigs has come down to 2 years from 3 years. No wonder RIL would rather buy the rigs directly from shipyards. By the way, Bharati Shipyard has become the first company in India to start building offshore rigs.
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Posted By: ThinkDifferent
Date Posted: 29/Apr/2008 at 10:46am
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Results: http://economictimes.indiatimes.com/Stocks_in_News/Aban_Offshore_Q4_net_up_17_per_cent_at_Rs_3455_cr/articleshow/2996085.cms ------------- I am an Amateur in Stocks. |
Posted By: basant
Date Posted: 16/Jul/2008 at 9:50pm
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Can anyone update us with the latest estimates if any. Also please send me a brokerage report on this if you have any.
------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |
Posted By: smartcat
Date Posted: 16/Jul/2008 at 12:07pm
| Emkay Research now estimates an EPS of Rs.376 in FY09 and Rs. 533 in FY10. |
Posted By: prashantmohta
Date Posted: 16/Jul/2008 at 12:22pm
| smartcat ji,they have taken massive loan in the books . do u think it will affect them or western companies are doing in the same manner. |
Posted By: prashantmohta
Date Posted: 16/Jul/2008 at 12:26pm
| though ebdita margins are high and roe is being created by huge debt.i think they have 55%.correct me if i am wrong. |
Posted By: smartcat
Date Posted: 16/Jul/2008 at 12:32pm
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Going by the rates that some of these deep sea oil rigs are being leased out for, such a staggering growth in EPS is a possibility. But the are markets are butchering the stock anyway - high crude/rig rates not withstanding. However, the stock price of Transocean (NYSE: RIG), the world's largest rig company, has been soaring (and rightly so).
As a pure play rig leasing company, Aban is the best choice. However, GE Shipping (thanks to its investment in offshore rigs) and perhaps Shiv Vani are "safer" because of their diversification.
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Posted By: smartcat
Date Posted: 16/Jul/2008 at 12:37pm
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If the day rates for rigs stay at $250,000 - $400,000 per day, then their debt will be almost wiped out in 3 years from the cash flows.
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Posted By: prashantmohta
Date Posted: 16/Jul/2008 at 12:40pm
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good point.now tell me if crude fall to 70$.
do rates of rigs varries.
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Posted By: smartcat
Date Posted: 16/Jul/2008 at 12:46pm
| A few months back, I had read somewhere that new exploration (and hence demand for rigs) would be affected if crude falls to $40 - $50 a barrel. |
Posted By: basant
Date Posted: 16/Jul/2008 at 7:37am
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Some questions: Their website does not seem to have complete details. It has a 2006 presentation on their business but that is a bit too old.
Any idea on the latest number of mobile offshore drilling units and breakup in terms of floaters, jackups, and other rigs, ultra-deepwater floaters contracted for or under construction.
Any new capacity that you think is being put up.
I saw Emkay get it wrong with regard to the Banks in march 08 and hence do not feel confident of betting on their data.
Is there a rule by thumb approach where you can say so many rigs at US $ ?? for one year and similarily work out with costs.
If rig rates go up then there is tremendous operating leverage because costs do not rise propotionately.What is the average price of crude in which these rates have been contracted for do you expact renewal to be coming sometime soon?
------------- 'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in |