17 Jun 2011

ENS Economic Bureau

Hyderabad: Gulf Oil Corporation Ltd, which hived off its explosives business into a wholly-owned subsidiary last year, said it would induct a strategy partner by end 0f 2011. With margins coming under pressure due to high interest rates and increasing costs, the company said it was de-risking its business strategy foraying into property development and cutting losses in mining business.

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The recent restructuring exercise is expected to help the company clock a consolidated revenue of Rs.1200 crore in FY12 up from Rs.1,100 crore it achieved in FY11. The explosives division recorded a turnover of Rs.120 crore in last six months but is expected to perform better in coming quarters.

"We are exploring technical and financial collaborations either with a local or a foreign partner. We hope to finalise this by end of 2011. The idea is not only to get into new generation technologies but also get more volumes," said Subhas Pramanik, Managing Director, Gulf Oil Corporation Ltd. The explosives business PAT stood at Rs. 28 lakhs last fiscal.

Its lubricants business, which generates over 65 percent of total consolidated turnover, would continue to drive business and is expected to register an EBITDA of over 11 percent this fiscal.

"Lubricants will continue to be the success story, while value creation will come from property development.We are also cutting losses in mining business now that the limitations imposed on mining blocks by Government are relaxed," he said

He added that margins were under pressure due to increase in base oil prices besides increase in fuel and interest rates. But we are confident of maintaining last year's 22-24 percent growth in sales in FY12 too.discount fake watches