Brokerage firm Anand Rathi has identified Gandhar Oil Refinery (India) as a compelling stock pick for October 2024. Investors are encouraged to consider buying shares within the price range of ₹225-228, with an anticipated price target of ₹255. For risk management, a stop-loss has been advised at ₹208 based on daily closing prices.
In the latest trading session, Gandhar Oil Refinery stock demonstrated a positive performance, closing at ₹229.49 per share, reflecting a notable increase of 3.70%. Over the past month, the stock has gained over 6.78%, and it has performed well over the last six months with an uptick of 4.38%. Such movements indicate strong investor interest and confidence in the company’s growth potential.
Technical Analysis
The technical indicators for Gandhar Oil Refinery suggest an optimistic future. The stock has recently broken out from the Ichimoku cloud, marking a significant development that occurred alongside a breach of the bearish trendline on the daily chart. Moreover, the Relative Strength Index (RSI) has shown resilience by forming a base around the 40-50 level range before the breakout, signaling an emerging bullish momentum that could continue in the upcoming sessions.
Recent Developments
Gandhar Oil Refinery has expanded its footprint in the global market through its foreign subsidiary, Texol Lubritech FZC, which secured a substantial order from the Abu Dhabi National Oil Company (ADNOC) in July. This significant contract underscores the company’s capability to provide quality products and services internationally.
Contract Details
The scope of the order entails manufacturing, packaging, labeling, and ensuring the availability of products to ADNOC Distribution on a contractual basis. This collaboration not only strengthens Gandhar’s portfolio but also enhances its reputation in the oil and lubricant sector.
Financial Implications
The estimated annual value of this contract stands at approximately $45 million, translating to around ₹375 crore for each year across 2024, 2025, and 2026. The contract is set for a three-year duration, promising a steady income stream for Gandhar Oil Refinery during this period.
Volume Projections
Throughout the contract’s duration, the projected average annual volume is set at 30 million liters per year. The pricing structure will be determined as per a formula outlined in the agreement, ensuring that the terms remain attractive for both parties involved.
Company Overview
As a key player in the oil and lubricant industry, Gandhar Oil Refinery specializes in refining and producing a diverse array of specialty oils and lubricants. Their product offerings include liquid paraffin, greases, automotive lubricants, petroleum jelly, and rubber processing oils. This wide product range caters to various industrial needs, enhancing the company’s market presence.
Market Performance
Gandhar Oil Refinery made its stock market debut in November 2023, launching with an IPO price of ₹169. The stock initially surged, listing at a remarkable 76% premium by reaching ₹298. Although it hit an all-time high of ₹344, subsequent market adjustments have seen the stock trade approximately 35% below that peak, suggesting potential for recovery and growth.
