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Gulf Oil, which is the leading lubricant and industrial explosive company saw a big relief after Competition Appellate Tribunal issued final order and reduction of the penalty to 10%. The company in its release filed with the stock exchanges said that it is now liable to pay just Rs 2.89 crores as against the original penalty of Rs 28 95 crores imposed by the Competition Commission of India (CCI).
Had the company been charged the actual amount it would have led to erosion in earnings as penalty formed almost 60% of company's net profits in FY12 and 4.5% of market capialsiation of the company. On Thursday its stock on BSE witnessed 60% delivery volumes. Stock recently made 52 week low at Rs 56.25 in March 2013 and later recovered marginally to current level of Rs 64.15%. It is currently trading at 1.5 its book value and offering 3.45% dividend yield.
Gulf Oil was panelised along with other explosive manufacturers in April 2011 by competition commission Coal India alleged the companies of being engaged in anti-competitive conduct collectively determining prices. In one of the tenders in 2005-06, these explosive companies are considered to have quoted identical price of Rs 19,500 per tonne, which was considered to be about 45% higher from the previous year. Gulf Oil is the Hinduja Group company with an annual turnover of Rs 1,442 crore and net profit of Rs 50 crore. In first nine months of current financial year the company has made a sales turnover of Rs 837 crore (up 8.1%) and net profit of Rs 33.31 crore, which is up 17.2% capered to last year.
