Assam Company… CMP: 22 … a Multibagger in Making

Dear Friends,

I have been tracking this company since long…. I have also mentioned this stock on my blog a couple of times….. recent development in this company couldn’t stop me to write here…. This is not a buy call… I am writing because I love this company, the way it is shifting its core business silently is appreciable…. This company can prove to be a true Multibagger in due course of time… I could not give any specific number but returns could be much more then your expectations……

70% of holdings is in strong hands.. Assam oil company holds a major chunk of 38%..... though this is not a undiscovered stock but everyone is waiting for it to move now………….

Company has done FCCB buy back in year 2009 that shows its confidence of its management in their company…

Company is taking the steps to minimize the cost of production of orthodox tea.... main trigger is its business shift towards oil and gas sector.... It is going to get involved in GAS COmpression Project and Oil&gas projects with respect to NELP VII with ONGC and OIL India Ltd as partners..... …. Mind boggling fundamentals + massive & ambitious expansion plans + major positive announcement are going to happen anytime in this year…. It has also acquired new tea gardens where by the profitability will go up sharply.

MCAP of company is 681croses wherein equity is just only 30 crores…..this is a big positive

Also going in developing an SEZ Project of Gujarat Hydrocarbons and Power SEZ ltd in over 1,000 acres in Vilayat, Near Dahej, in the state of Gujarat. Company has already possessed 700 acres of Land Bank. Rest of the land is under acquisition and same will be completed soon.

Oil and gas segment will be a major breakthrough for Assam Company, due to production ramp-up at Amguri fields the bottom line can increase many folds in coming next 3-4 years…. In my views it has just started to run…

Assam company is installing gas re-injection plant to improve oil and gas performance, Installation of the gas re-injection plant would ramp up production to 2,000-2,400 BOE by the end of 2QCY10 with 2/3rd oil share thus optimizing the field produce….

We can expect tea business to grow at a CAGR of 9-10% during next three years. As I told earlier they are trying to build up methods to reduce plantation cost and method of re-plantation, infilling of high quality bushes, strategic acquisition of Tea estates and improve quality through pursuing proven processes. Due to widely predicted global shortage, tea is expected to experience higher realization in CY2010 and ahead,

In my views, Assam Company is a great stock to buy and hold for long term(5-6 years)… there is a lot of value to be unlocked for investors… but here patience will win over hurry and greed….. Though the stock hasn’t ran in last 3-4 years but it doesn’t prove that it will not run in coming years also…. Recent development plans if executed well can fetch golden eggs in days to come…… take your own decision and do proper research before buying……