Thursday, March 10, 2011

GACL - ON A CYCLICAL DOWNTURN.. Buy now to ride the upturn

GACL current M.Cap is 800 Cr., while if we adjust its M.Cap for its investment in other Gujarat PSU's ( worth approximately 750 cr.), the business is available for just 50 CR. (0.5 x profits). You wont get a better time to buy GACL. Even caustic soda prices seem to have bottomed out. As the textile /leather/paper industry pick up pace in Inida, caustic soda prices should firm up.

Summary of GACL Holding 
Investment                             No. of  Shares            Price  per  share   Value
GIPCL23,088,98090207.8
GSFC150000037055.5
IDBI3188001504.8
GSPC2154320080172.3
GCPT114900001011.5
TOTAL451.9

1 comment:

  1. GACL really is a great idea. The expansion projects that they are implementing will allow an appreciable EPS growth in the near term. I expect the share price to atleast trible from current levels. The company is planning a number of wind farms which will give them tax benefits. Besides wind power, they are also executing a power plant in collaboration with GIPCL. Post completion of these power projects, GACL will become self reliant as far as power requirement is concerned. It will also substantially bring down their power cost whcih is a decent percentage of their total cost structure.
    As far as expansion projects are concerned, they have recently implemented a 50 TPD caustic soda expansion project. They are expanding their hydrogen peroxide facility at dahej by 100% which should be ready by 2011. They are also putting up a calcium chloride project as part of value addition of the hydrochloric acid plant. The project has recently been commissioned. A stable bleaching powder project has also been recently implemented. The most important project is DOW GACL JV being 2lkhs TPA capacity Chloromethane plant at Dahej ( Rs 750 cR.)

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