Ibp Co: Poor Growth, Flat Earnings Seen

Besides, IBP has transferred its lube oil blending plant to its joint venture. Hence, revenue from sale of lubricants will no longer accrue to IBP. It is the only company in India which markets petro products without any captive sources. The company's present market share is slightly below 5 per cent, making it the smallest player in the sector. The company was incorporated in 1909 as Indo Burma Petroleum Company in Rangoon, nationalised in 1970 and renamed IBP Co Ltd in 1983.

IBP comprises three business groups - petroleum, which is the major group contributing 95 per cent to the company's revenue, chemicals and engineering. The petroleum group, besides developing marketing infrastructure for the petroleum products, also manufactures and markets pressure regulators. The manufacturing is done at Sewri in Bombay. The chemicals business group is primarily involved in manufacturing various category of explosives, detonating fuse, cast boosters and shaped charges.

 

IBP had a lube oil blending plant which has now been transferred to IBP Caltex, a joint venture between IBP (49 per cent)and Caltex Oil Corporation(51 per cent). The revenue that IBP has so far been generating will no longer accrue to IBP but to the joint venture. Balmer Lawrie & Co, a subsidiary in which IBP has a 62 per cent stake, is a very good source of dividends for IBP.

IBP is setting up a 3 mmtpa grassroots refinery in Assam. The refinery is expected to be operational in 1999. IBP will be able to source part of its product requirement from this refinery. A fresh look could be given to the stock when the Numaligarh Refinery nears completion.