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Selan Exploration Technology Ltd. Stock Analysis

Small Cap
Evaluated by 993 users | BSE: 530075 | NSE: SELAN |
Oil Exploration
Selan Exploration Technology was incorporated on July 5, 1985 as a private limited company in the Union Territory of Delhi. The company became a public limited company on October 15, 1990. Selan started as a company engaged in the field of seismic data acquisition, which is an integral par t...

Analysis of Financial Track Record

Data adjusted to bonus, split, extra-ordinary income, rights issue and change in financial year end
Financial track record gives insight into the company's performance on key parameters over the past ten years. MoneyWorks4me’s proprietary colour codes make it easy for retail investors to gauge the company’s past performance.
Selan Exploration Technology Ltd. has performed well in some of the past ten years indicating its past ten year financial track record is somewhat good
Value Creation
 Mar'11Mar'12Mar'13Mar'14Mar'15Mar'16Mar'17Mar'18Mar'19Mar'20
Return on Capital Employed 18.38%22.41%20.26%17.85%10.5%5.03%3.18%7.69%16.63%9.02%
Growth Parameters
Growth Parameters Colour Code Guide
Net Sales (Rs. Cr.) 7192.797.110179.36255.876.693.389.6
Y-o-Y Gr. Rt.-30.7%4.7%4.3%-21.7%-21.8%-10%37.2%21.8%-4%
Adjusted EPS (Rs.) 18.6826.3527.1427.1617.297.935.4513.4832.5419.32
Y-o-Y Gr. Rt.-41.1%3%0.1%-36.3%-54.1%-31.3%147.3%141.4%-40.6%
Book Value per Share (Rs.) 99.84122.19141.32159.64170.93172.79172.07179.51205.82215.63
Adjusted Net Profit 31.744.845.744.528.4138.922.151.529.4
Net Op. Cash Flow (Rs. Cr.) 42.447.447.774.761.71737.567.299.541.1
Debt to Cash Flow from Ops 0.890.25000000.010.010.01
Standalone financials take only the parent company into account while consolidated financials take into account financials of the parent company as well as of all its subsidiaries. In most companies consolidated financials should be used for analysis.
Selan Exploration Technology Ltd. should be analysed on a Standalone basis
CAGR
CAGR Colour Code Guide
  9 yrs 5 yrs 3 yrs 1 yr
Net Sales 2.6%2.5%17.1%-4%
Adjusted EPS 0.4%2.3%52.5%-40.6%
Book Value per Share 8.94.87.84.8
Share Price -11.1% -16% -24.2% -28.3%
Key Financial Parameter
Performance Ratio Colour Code Guide
 Mar'11Mar'12Mar'13Mar'14Mar'15Mar'16Mar'17Mar'18Mar'19Mar'20
Return on Equity (%) 20.2723.7420.5117.8310.464.613.167.6716.618.99
Operating Profit Margin (%) 62.5164.8562.0255.7944.4123.2116.3237.3349.6340.59
Net Profit Margin (%) 44.7348.2847.0543.9835.7720.9616.0228.8555.232.77
Debt to Equity 0.220.0600000000
Working Capital Days 131125137147217280239141125127
Cash Conversion Cycle -118-116-30-99-211-146-5595660
Entity Percentage Holding
Promoters 30.09%
Institutions 4.23%
Non-Institutions 65.68%
Pledged *0.000.000.000.000.000.000.000.000.000.00
* Pledged shares as % of Promoter's holding (%)

MoneyWorks4Me analysed the past 10-year performance of Selan Exploration Technology Ltd. and arrived at the following conclusion:

Past 10 year's financial track record indicates that Selan Exploration Technology Ltd. is a average quality company. However, for specific investment actions please connect with your investment advisor.

The 5-year analysis of Selan Exploration Technology Ltd.'s performance infers:

Selan Exploration Technology Ltd. earnings have grown by 2.3%, whereas share price has depreciated -16% CAGR over the past five years, indicating the company's share price is likely undervalued. However, for specific investment actions please connect with your investment advisor.

We analysed the performance of Selan Exploration Technology Ltd. share prices over the last 10 years. Here is what we found out:

Selan Exploration Technology Ltd. share price has depreciated -10.5% annually over the past ten years.

Selan Exploration Technology was incorporated on July 5, 1985 as a private limited company in the Union Territory of Delhi. The company became a public limited company on October 15, 1990.

Selan started as a company engaged in the field of seismic data acquisition, which is an integral par t of oil & gas exploration. Based on its performance and its technical expertise, the company was awarded a contract to develop three discovered oil fields in Ahmedabad area of Gujarat State by the

Selan Exploration Technology was incorporated on July 5, 1985 as a private limited company in the Union Territory of Delhi. The company became a public limited company on October 15, 1990.

Selan started as a company engaged in the field of seismic data acquisition, which is an integral par t of oil & gas exploration. Based on its performance and its technical expertise, the company was awarded a contract to develop three discovered oil fields in Ahmedabad area of Gujarat State by the Ministry of Petroleum and Natural Gas, Government of India (“GOI”). The GOI has signed a Production Sharing Contract with the Company on March 13, 1995. In terms of this agreement, the GOI has contracted with Selan to lift the entire production of the oil fields. The period of the contract is 25 years from the effective date with the provision of extension by an additional five years. The company sells the entire crude oil production to the GOI’s nominee, Indian Oil Corporation.

The promoters and management have extensive experience and domain knowledge in the field of Petroleum Exploration, Development and Production as well as in the field of Geophysical Data Acquisition, Processing and Interpretation.

Following the move by the Government of India in 1992 in opening up the oil sector for private initiative in exploration and production of Hydrocarbons, Selan was amongst the first private sector companies to have obtained rights to develop three discovered oilfields situated in the state of Gujarat namely Bakrol, Indrora and Lohar, all with proven oil and gas reserves. Selan was subsequently awarded two more fields in Gujarat namely Ognaj Oilfield and Karjisan Gas field.

All the oil and gas blocks have a well laid out infrastructure. Hence these blocks are easily accessible and are in close proximity to the Government's crude gathering station as well as are in close proximity to a large industrial town.

The various seismic and reserves assessment studies have established substantial amounts of oil and gas reserves in these blocks. Selan thus has significant oil and gas assets in its control which require developmental work and for the purposes it would require substantial amounts of Capital investment to augment its development and growth objectives.

Selan has a Development Plan for drilling of additional wells in these blocks in the next 3 to 5 years. The Plan is intended to be executed in a phased manner and would involve large capital expenditures, to be funded through a combination of external borrowings and internal accruals. The proposed external borrowings shall be drawn in various stages of completion of each phase. This approach offers a view to judiciously monitor the debt.

With assured offtake of the entire oil and gas production from these blocks by the Government, as per the terms of the Production Sharing Contract (PSC) there is zero marketing risk associated with this project.

Business area of the company:

Selan Exploration Technology (SELAN) is a private sector listed company, engaged in oil exploration and production since 1992. In the last two years, the company has also signed two more Production Sharing Contracts with the GOI for discovered oil fields in Gujarat.The company iis engaged in the exploration of - Hydrocarbons, oil and gas.

Future plan:

SELAN has a Development Plan for drilling of additional wells in these blocks in the next 3 to 5 years. The Plan is intended to be executed in a phased manner and would involve large capital expenditures, to be funded through a combination of external borrowings and internal accruals. The proposed external borrowings shall be drawn in various stages of completion of each phase.

Puchho Befikar
SEBI Registered: Investment Adviser - INA000013323
Research Analyst - INH000000719

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