Shiv Vani Oil & Gas Exploration Services

Volumes of Trading Low

Net Loss

Shiv Vani Oil & Gas Exploration Services has made a net loss of Rs.811 lakh for the quarter ended 30.09.11 compared to a net profit of Rs.2264 lakhs for the quarter ended 30.06.11. Its total income has also declined from Rs.34953 lakh to Rs.28895 lakhs. Promoter group holds 54% of the shares in the company. Public shareholding is around 45%.

Volumes of Trading Low

The shares of Shiv Vani Oil are traded in the Indian stock markets at Rs.167 now (NSE 14.04.12). The highest and the lowest price recorded by the shares of Shiv Vani Oil in the last one year are Rs.319 and Rs.161 respectively. The face value of the company’s shares is Rs.10. The stock market position of the company is as follows: Quantity Traded 12,761, Deliverable Quantity (gross across client level) 11,630, percentage of Deliverable Quantity to Traded Quantity 91.14 %. This high percentage shows that buyers are expecting the share price to rise in the short term. But the volumes are not sufficient to back these expectations.

Last Year, the Expectations Were High

Winning orders from ONGC and repayment of its debt will no doubt spur an upraise in the share price of the company. Last year by the same time, the company’s board of directors considered raising funds through Qualified Institutional Investors by issuing eligible securities including non convertible debt instrument with warrants and equity shares for Rs.500 crore. Last year, the company’s shares outperformed the Sensex. Last year Shiv Vani Oil bagged small orders worth Rs.200 crore from India’s premier oil exploration company ONGC for three oil rigs. The company also repaid non-FCCB debt.

Never Trust Big Financial Analysts

IIFL gave a recommendation for buying the shares of Shiv Vani Oil an year back and set the target price at Rs.480. But the recommendation failed to click. Investors who followed the IIFL recommendations not only burnt their fingers but their hands also. In its May 17 2011 report, ICICI has recommended buying of the shares of the company, setting a target of Rs.319. In that report, ICICI mentioned that the order book position of Shiv Vani Oil had declined to Rs.2700 crore due to lack of order taking for the past few quarters. If the order book had declined, why did ICICI recommend for buying of the company’s shares? JRG Securities set a target price of Rs.483 for the company’s shares in its December 2010 report. Kedar Deshpande of Edelweiss Securities set a target of Rs.525-550 for the company’s shares while interacting with CNBC-TV18 in November 2010. Suhas Samanth, Head PMS, Sharekhan set a target price of Rs.434 for the company’s shares while speaking to the same TV channel in October 2009. JP Associates also recommended buying the company’s shares in August 2011. These recommendations by well known financial analysts and share brokers reveal how misleading their reports can be. Investors should never trust the reports of these so-called top financial analysts. These analysts make their reports, never taking into consideration the welfare of the investing public. They always are subservient to their organisations and to themselves. Investors should rely on the reports of only independent financial analysts who have no stake in the stock market.

Opportunities Galore, But No Marketing Skills

Shiv Vani Oil is a leading domestic company in onshore gas and oil exploration. There is an estimated $4 billion onshore opportunity of oil and gas in India. But the company has not bagged the expected flow of orders and its order book position has rather been lean. This shows the lack of aggressive marketing strategy on the part of the company.

Do Not Invest

As the company has incurred loss and its order book position is not upto the expected level, it will be prudent for the investors not to invest in the company’s shares at the current price of Rs.167. Existing investors may switch over their investment to State Bank of India.

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Comments 2 comments

amrutha stocks profile image

amrutha stocks 4 years ago from kerala

don"t worry, it will come back

ramkimeena profile image

ramkimeena 4 years ago from India Author

Dear XXXX,

I thank you for your valuable comments. By the way I do not have any worries about this stock or any other stock as I am not an investor or broker but mere financial analyst

Best wishes to you,

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