Ashish Chugh bullish on Videocon's oil, FMCG biz

Ashish Chugh, Invesment Analyst and Author of Hidden Gems said that Videocon is a well-established brand name. Last year, this company acquired Thomson CPT Ltd, which has got manufacturing operations in four countries, he said.

He added that this company has got 25% stake in the Rawa Oil field, which is on the Eastern Coast of Andhra Pradesh and Rawa Oil field produces close to about 50,000 barrels per day.

On Videocon:

Videocon Industries is primarily into three business segments: consumer electronics, oil and gas and telecom. This company currently derives revenues from the first two business segments, which are consumer electronics and oil and gas.

Starting with consumer electronics business, Videocon is a well-established brand name. Last year, this company acquired Thomson CPT Ltd, which has got manufacturing operations in four countries. Besides this, the company has also acquired the Indian operations of Electrolux Sweden.

Coming to the oil and gas business, this company has got 25% stake in the Rawa Oil field, which is on the Eastern Coast of Andhra Pradesh. The Rawa Oil field produces close to about 50,000 barrels per day. The company derived a profit of close to Rs 450 crore for the financial year-ended September 2007.

Incidentally, the financial year for Videocon Industries is October to September. So, for September 2007, this company derived a profit of about Rs 450 crore from Rawa Oil field. On account of higher prices, the company expects a profit of about Rs 800 crore from Rawa Oil field.

Besides the Rawa Oil field, that is an operational field, this company has got other substantial assets in the Oil and gas industries. This company has got a field in Oman where it has got 25% operating interest. This field is supposed to have a potential of about USD 4 billion barrels, which is a huge in terms of quantity and the revenues which it can accrue to that company.

Besides these two fields, this company has interest in oil fields in Timor, Southern Australia and Western Australia. It has also taken over the South American assets of a Canadian company called EnCana Corporation. The Brazilian company has got about ten offshore blocks in Brazil. Coming to telecom this company has obtained a license for 22 circles. 

Disclosure:

I have holdings in both stocks discussed.