Medium Term Picks

GMDC Ltd(GMDC) -A Valuation Play

GMDC Ltd – Investment Snapshot (as on Jan 15, 2015)

Recommendation :- BUY

Maximum Portfolio Allocation :- 2%

Investment Phases & Buying Strategy

Time Frame:- 3 to 6 months

1st Phase (Now) of Accumulation :- 50%

Current Accumulation Range :- 72-75 Rs

GMDC is a midcap mining company based out of Gujarat and is

the largest seller of lignite in India.. The company has got strong

presence in the state of Gujarat and will benefit from commodity

price rebound that is likely in the medium term..

Core Investment Thesis : Among all its products, lignite contributes ~80% of the total sales

value and thus is the major contributor to the bottom line of the

company. The other major contributor to the revenue has been

the power division.The stock at the CMP of 74.10/- is trading at

5.22x its FY15 EPS. The stock currently offers a dividend yield of

4.01% and is trading at historic lows.

Current Market Price – Rs. 74.10

Book Value – 101.94

Bloomberg / Reuters Code –GMDC. IN/

GMDC.NS

BSE / NSE Code – 532181 / GMDCLTD

Market Cap (INR CR) – 2379

Total Equity Shares [Mn]– 63.6

Face Value – Rs. 10

52 Week High / Low – 159.90/67.00

Pro oter’s Holdi g - 74.00%

Other Holdings -26.00%

Lignite and power production

Company Overview

•GMDC is a mining and mineral processing company and the largest merchant seller of Lignite in India. The

company produces lignite, bauxite, fluorspar, and manganese ore and is also engaged in power generation.

• The company offers lignite for numerous industrial units including textiles, chemicals, ceramics, bricks, and

power.

•GMDC has started operations in Umarsar Lignite Mine and Mevasa Bauxite Mine in the FY 2014 – 15 that

added further value to co pa ’s mining business.

•GMDC’s si active lig ite i es together produced .0 lakh metric tonnes of lignite during the FY 2014 –

15, while eight active Bauxite mines produced 2.6 lakh metric tonnes of Bauxite.

Product wise performance

•GMDC’s lignite sales has increased from about 87.09 Lakh MT in FY15 from 84.13 Lakh MT in FY14 an

increase of about 3.52%.

•GMDC’s power division consist of ATPS Thermal Power Plant, Wind Power Plants and Solar Power Plants

with about 1669.5 Mega Units of power produced in the FY 2014-15.

•PLF of Akrimota Thermal Power Plant and Wind Power have increased to 62.04% and 23.04% respectively in

FY 2014-15.

•GMDC has ventured into value added services through joint ventures and projects with plans to produce

cement, zeolite, chemicals and benefi ciation of minerals like Fluorspar etc which will drive future growth.

Project wise sales - Mining

Project wise sales - Power

Financials

ONGC Ltd(ONGC) -A play on crude Oil

ONGC Ltd – Investment Snapshot (as on Jan 15, 2015)

Recommendation :- BUY

Maximum Portfolio Allocation :- 2%

Time Frame:- 3 to 6 months

1st Phase (Now) of Accumulation :- 50%

Current Accumulation Range :- 225-230 Rs

ONGC is a large-cap exploration company which has several oil

& gas fields and is the largest exploration company in the

country. The company has got strong presence throughout the

country and will benefit from oil price rebound that is likely in

the medium term.

Core Investment Thesis : ONGC is primarily engaged in the exploration, development and

production of crude oil and natural gas in both India and

abroad.The stock at the CMP of 223.25/- is trading at 10.80x its

FY15 EPS. The stock currently offers a dividend yield of 4.23% and

is trading at historic lows.

Current Market Price – Rs. 223.25

Book Value – 169.02

Bloomberg / Reuters Code -ONGC. IN/

ONGC.NS

BSE / NSE Code – 500312 / ONGC

Market Cap (INR CR) – 192199

P/BV - 1.35

Face Value – Rs.5

52 Week High / Low – 378.40/217.70

Pro oter’s Holdi g - 68.93%

Other Holdings -31.07%

Company Overview

•Set up in 1956, ONGC is primarily engaged in the exploration, development and production of crude oil and

natural gas in both India and abroad. ONGC, through its wholly owned subsidiary ONGC Videsh Ltd (OVL),

has a presence across 14 countries with participating interests in 33 projects comprising ten producing

projects, 18 exploration blocks and four development blocks for its E&P activities.

• ONGC is also present in downstream refining and marketing operations in India through its subsidiary

MRPL, which operates a refinery with an installed capacity of 11.8 MMTPA. ONGC is also involved in

production of LPG and other value added products, alternative energy projects and exploring the feasibility

of setting up a nuclear power project.

•The ONGC group has large 1P, 2P and 3P crude oil and natural gas reserves base of 936 mtoe, 1,662 mtoe

and 2,009 mtoe, respectively, covering a total exploratory area of 4,79,210 sq km in India and 150,323 sq km

overseas.

Reserves

Falling Discounts- Increasing Realizations

Financials(Fig in Rs. Cr)

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