GOCL formerly known as Gulf Oil Corporation Ltd has been an industry leader in Energies and Commercial Explosives by providing innovative solutions to its customers and it has already served India’s mining and Infrastructure industry for more than 60 years. Apart from mining and explosives company has extended its products and offerings portfolio in different verticals such as Electronic manufacturing systems (EMS) for OEMs, Metal Cladding Division, Special Purpose Group (SPG) for defence and space applications and Realty vertical for land banks and commercial spaces. To cater to the demand of its clients, company’s manufacturing facilities and Silo plants are in 30 locations across India and on Global front GOCL is the largest exporter of explosives and initiating devices to 20+ countries which includes Gulf, Philippines and countries in South East Asia, North Africa, Middle East and Southern Europe such as Greek and Turkey and it has generated 90Crores from global business imposing a 105% growth in its Exports business as on FY23. Company’s wholly-owned subsidiary, IDL Explosives Limited (IDLEL) has reported a substantial growth of 96% in annual income, standing at Rs.785 crores in FY23. Company has spent Rs. 1.08 crores in R&D along with a Capital expenditure of ₹19 crore. As on FY23 company produced 91451 tonnes of Bulk Explosives, 19306 tonnes of Packaged Explosives, 3.93 crores of Electric and Plain Detonators, 1.35 crore meters D-cord, 873050 Electronic Detonators and 96.02 MT Bossters. To cater to the demands of changing world scenario company is aiming to increase its product and service offerings in Defence and Space sector and for the same company has also applied for license to manufacture certain defence products related to aircraft pilot safety. The company also plans to enhance its presence in Electronic Sector and specifically area related to Automotive Engineering, Automobile Battery charging, 5G equipment etc.

Fundamentals (FY22-23):

Financial Results:

Company’s Net Sales was at Rs 197.22 crore in June 2023 down 16.66%, Quarterly Net Profit at Rs. 12.16 crore in June 2023 down 90.28% and EBITDA stands at Rs. 57.43 crore in June 2023 down 74.97% as compared to June 2022. Company’s EPS  has decreased to Rs. 2.45 in June 2023 from Rs. 25.22 in June 2022.

Key Points:

1. GOCL Corporation has bagged a Rs 766 crore order from state-owned Coal India Ltd (CIL) to supply explosives and the order will be over the period of two years — from October 2023 to October 2025 and another order worth 257.72 cr. for Supply of accessories, Detonators, Accessories and Cartridges Explosives over a period of 2 years.
2. GOCL has been a proud contributor to Historic mission of Chandrayan – 3 by ISRO for production of Special Purpose Motors (SPMs) and Igniter Grains (IGs). These components are vital to the success and reliability of spacecraft propulsion systems.
3. IDL Explosives Limited (IDLEL), a wholly-owned subsidiary of the GOCL, has recently bagged an order from Singareni Collieries Company Limited (Singareni) for supply of bulk explosives and accessories by IDLEL and also from GOCL.
4. On acquisition front GOCL recently acquired APDLE which is engaged in the business of development of commercial spaces and other real estate projects. At present, APDLE has a commercial building in Begumpet, Hyderabad, with a revenue area of about 45,000 sg.ft situated at Malleshwaram, Bangalore. This acquisition will help the company to consolidate its Realty business.
5. On real estate front company has land banks in Bengaluru, Hyderabad (Kukatpally), and Bhiwandi which will be moentised by the company soon to create a sustainable flow of income. At Kukatpally the company sold 44 acres of land for a consideration of Rs. 451 crores.
6. On Special projects front the company has recently designed, developed and supplied trial lots for booster initiating system PJ-10 for the Brahmos missile of which all tests have been completed successfully and the first production order has been received.
7. On Investment front Company has invested $24 million in the restoration and development of the historical and marquee Old War Office (OWO) project located in Central London to convert it into a super luxury hotel and luxurious residential apartments. Post conversion it will be operated and managed by the iconic Raffles Hotels, which ranks among the top 10 hotel brands in the world.
8. Company has entered in to an MOU with Gulf Oil Lubricants India Limited and Ashok Leyland Limited to develop and manufacture future ready EV chargers and auto electronics parts. The facility has been augmented with additional 8000 sft to accommodate new orders.
9. Company has also received Transfer of Technology (TOT) from Defence Research and Development Organisation (DRDO) for Canopy
10. Severance System (CSS) and it has already executed orders and been receiving many enquiries from DRDO, HAL and Indian Air Force for supply of Canopy Severance System.
11. Company has also completed R&D work and product trials for Electronic Fuze with indigenously developed explosive train have been successfully completed with in-house qualification tests and company expects first production lot to be supplied in F24.
12. Company has also successfully conducted in house qualification tests and already executed trial order for supply of Squib Pyro Cutter and EAPRV Squib. This business of the company has achieved a turnover of Rs. 4 crores during the year under review (previous year Rs. 6 crores).
13. Company has also conducted trials and successfully supplied the 2.1 Seconds Delay Pyro for Brahmos project with required modification in specification as per STAR DRDL and further orders are expected by the company in F24.

In last 3 Years the stock gave a whooping return of 246.71% as compared to the rise of Sensex and Nifty in the same period.

Company has a very good clientele of marquee Private as well as Government companies such as BDL, Tata Steel, BCCL, HAL, DRDO, UCIL, Indian Army, Titan, HZL, Bharat Forge, UltraTech, ACC, JK Laxmi and many more. Considering company’s year long expertise in Explosives and detonators and its foray into upcoming and growth-oriented sectors such as EV and Battery infrastructure, 5G, Defence and Space and EMS backed with good financial performance and Government of India’s Make in India initiative company is a sweet spot to enjoy higher monetary benefits in upcomings years. Investors can invest in this company for long term period.

HET ZAVERI

info@smartinvestment.in

(Disclosures: At the time of writing this article, author, his clients & dependent family members may have positions in the stocks mentioned above. The author, his firm, his clients or any of his dependent family members may make purchases or sale of the securities mentioned in website. Author may have positions in above stocks so have vested interest obviously in their going up or down as the case may be.

Disclaimer: Investing in any equity is risky. Our recommendations are based on reliable & authenticated sources believed to be true & correct, and also is technical analysis based on & conceived from charts. Investors should take their own decisions. We assume no responsibility for any transactions undertaken by them. The author won't be liable or responsible for any legal or financial losses made by anybody. Investors must take advice from their financial advisors before investing in any stocks.)