1. UNEXPLORED MULTIBAGGER SMALL CAP STOCKS
EQUITY RESEARCH REPORT
TIDE WATER OIL LTD. BSE CODE: 590005
NSE CODE: TIDEWATER
Industry: Lubricants CMP: Rs. 7744.50 (30/10/2012)
Market Cap: 6747.01 (Millions) Target Price: Rs. 12500.00
Date: October 30, 2012 Time Period: 18 – 24 months
Saral Gyan Capital Services
www.saralgyan.in
An Independent Equity Research Firm

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TABLE OF CONTENT
S.No Content Page No.
1. Company Background 03
2. Recent Developments 07
3. Financial Performance 08
4. Charts & Graphs 10
5. Peer Group Comparison 12
6. Key Concerns / Risks 12
7. Saral Gyan Recommendation 13
8. Disclaimer 14

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1. Company Background
Tide Water Oil Co. (I) Ltd. is a part of the multi divisional Andrew Yule group that has
diverse interests in Engineering, Electrical, Tea Cultivation, Power Generation, Digital
Communication Systems and Lubricants.
Tide Water has been a pioneer of Automotive and Industrial lubricants in India since
1928 and has five plants at Howrah, Oragadam, Turbhe, Silvassa and Faridabad.
Its repertoire of automotive products includes engine oils for trucks, tractors,
commercial vehicles, passenger cars and two/three wheelers. It also produces gear oils,
transmission oils, coolants and greases for automobiles. For industrial application it
manufactures industrial oils, greases and speciality products like metal working fluids,
quenching oils and heat transfer oils. Tide Water has tie-ups for manufacture of genuine
oils with a number of renowned OEMs in the automotive and industrial equipment
segment.
Quality has been key area focus and the company has continued to innovate with high
performance products keeping pace with advancements in technology and market
needs. It reaches out to its customers through its pan India distribution network with
the popular range of products, widely accepted for their quality and excellence.
The company also has technical collaboration with JX Nippon Oil & Energy Corporation,
the No.1 petroleum conglomerate in Japan. Superior quality lubricants under the brand
name Eneos are manufactured and marketed in India by Tide Water Oil.
The company services the requirements of its customers through its wide marketing and
distribution network comprising of about 100 distributors, 300 dealers and 20,000
subdealers. Tide Water Oil markets its products under the brand name of “Veedol” in
the Indian lubricating market. During the year, Tide Water Oil acquired 100% equity
shares of Veedol International Limited, which owned the global rights of the brand
“Veedol”. Post this acquisition, Tide Water Oil would be able to venture into the
international lubricants market through the 100% subsidiary Veedol International
Limited.

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Products
Distribution Network

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Plants
1. Faridabad
Plant Capacity: Oil - 8,000 KL
Plot No. 119 | Sector 59 | HSIDC | Ballabhgarh | Faridabad 121004 | Haryana
Ph: 0129-2309623 | Fax: 0129-2307703 | Email: twofbd@sancharnet.in
2. Howrah
Plant Capacity: Oil -10,000 KL,
Grease - 1,800 MT
109 Foreshore Road | Ramkrishtopur |
Howrah 711002 | West Bengal
Ph: 033-26384652 | Fax: 033-26388315 |
Email: tworkp@yahoo.co.in
3. Silvassa
Plant Capacity: Oil - 40,000 KL
Survey No.158/1 | Village: Pati | D. & N. Haveli
(U.T.) Silvassa 396230
Ph: 0260 – 2699115
4. Turbhe
Plant Capacity: Oil - 14,000 KL
Plot-C441 | Turbhe | TTC Indl. Area | MIDC | Kalyan | Dombivli
Shil Road | Navi Mumbai | Dist. Thane | Maharashtra
Ph: (022) 27618125 / 27618164 / 27618100 | Email: veedol@mtnl.net.in
5. Oragadam
Plant Capacity: Oil - 16,000 KL, Grease - 2,600 MT
B-18, SIPCOT Industrial Park | Oragadam, Mathur Village
Sriperumbudur, Taluk - 602 105
Kancheepuram Dist. Ph: 044-27173530 - 36

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Research & Development
Quality has always been an area of focus at Tide Water Oil and it has continued to
innovate with high performance products keeping pace with advancements in
technology. It has been constantly upgrading its resources, infrastructure and work
environment to support its core values, quality aims and objectives.
Strict quality control adhering to stipulated standards is maintained at the plants located
at Howrah, Oragadam, Turbhe, Silvassa and Faridabad.
The hub of R&D for lube-oils for the company is located at Deonar, near Mumbai. The
R&D hub for grease is at Royapuram. These R&D centres are approved by the
Department of Scientific & Industrial Research, Ministry of Science and Technology,
Government of India.

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2. Recent Development
Tide Water Oil Company initiates global expansion programme - May 31, 2012
Tide Water Oil Company India Ltd has kicked off an international expansion programme
after the purchase of lubricant maker 'Veedol International Ltd' from BP International.
After buying German auto lubricant company, Tide Water Oil, which is an arm of
Andrew Yule Company Ltd, had bagged the right to sale Veedol products to nearly 120
nations across the globe, according to Kallol Datta, Chairman and Managing Director,
Andrew Yule.
While announcing the company's financial results for FY12, Datta stated that last year
and before the purchase of the Kolkata Based company, it saw 17% rise in sales to Rs
1,004.47 crores as compared to Rs 859.41 crore in the FY11.
He also said that besides marketing Veedol lubricants to 120 nations in phases before
the end of 2012, they are holding discussions with prominent Japanese auto lubricant
and oil producer 'JX Nippon Oil and Energy Corporation' for strengthening business
operations in India.
Tide Water Oil India Limited has acquired Scotland based - Veedol International from
BP Plc. – October 24, 2011
Tide Water Oil was set up initially to trade as an importer of Lubricants for the group
companies of Andrew Yule and other related industries. The imports were mainly from
Tide Water Oil Company, USA.
Tide Water Oil Company, USA, had a 22% ownership in Tide Water Oil which later was
transferred to Getty Oil, USA and then to the Texaco Group under the aegis of Four Star
Oil and Gas Company, USA, by a series of overseas M&As. Getty Oil after acquiring the
Tide Water Oil Company, USA, spun off the ‘Veedol’ brand, except in India, into a
separate company, Veedol International, Scotland and subsequently sold its stake in
Veedol International to BP Plc. BP Plc announced it's plans of selling Veedol
International and Duckhams in February this year.
In 2002, Andrew Yule decided to divest its stake in Tide Water as a part of a
restructuring excercise. A number of companies including IBP Limited, Caltex, Mitsubishi
Oil, Standard Greases and a Kolkata based entrepreneur - Mahendra Jalan were
interested in acquiring the company, but the disinvestment was stuck due to the dispute
over the 'Veedol' and 'Nippon Mitsubishi' brands. In 2008, Cheron Group owned Four
Star Oil and Gas Company sold its 22% stake in Tide Water, which was majorly bought
by Mahndra Jalan and Maharashtra based Standard Greases Private Limited.

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3. Financial Performance
Tide Water Oil Co (I) net profit declines 7.82% in the June 2012 quarter
Tide Water Oil Co (I) net profit declined 7.82% to Rs 163.9 million in the quarter ended
June 2012 as against Rs 177.8 million during the previous quarter ended June 2011. Net
sales rose 10.73% to Rs 2169.5 million in the quarter ended June 2012 as against Rs
1959.3 million during the previous quarter ended June 2011
Tide Water Oil Co (I) net profit declines 41.33% in the March 2012 quarter
Tide Water Oil Co (I) net profit declined 41.33% to Rs 138.7 million in the quarter ended
March 2012 as against Rs 236.4 million during the previous quarter ended March 2011.
Net sales rose 8.27% to Rs 2153.3 million in the quarter ended March 2012 as against Rs
1988.8 million during the previous quarter ended March 2011
For the Audited full year, net profit declined 7.92% to Rs 590.8 million in the year ended
March 2012 as against Rs 641.6 million during the previous year ended March 2011.
Sales rose 15.28% to Rs 8733.6 million in the year ended March 2012 as against Rs
7575.7 crore during the previous year ended March 2011
1 2 3 4 5 6
Net Sales 1988.8 1959.3 1828.8 2097.8 2153.3 2169.5
Net Profit 236.4 177.8 119.8 154.5 138.7 163.9
1988.8 1959.3
1828.8
2097.8 2153.3 2169.5
236.4 177.8 119.8 154.5 138.7 163.9
0
500
1000
1500
2000
2500
RsinMillions
Mar 11 Jun 11 Sep 11 Dec 11 Mar 12 Jun 12
Last 6 Quarters Net Sales & Profit

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Current & Expected Earnings
Quarterly Ended Profit & Loss Account
Expected Earnings for 3rd
and 4th
Qtr FY 2012-13:
Tide Water Oil Ltd has posted muted growth in FY 2011-12. In last 3 years, Tide Water
Oil revenue & net profit grew at a CAGR of 13.61% & 21% respectively over FY09-12.
We believe that in short term, company operating margins may remain under pressure
due to rising fuel prices and high interest rates but this may get mitigated partially by
the company’s venture into the international lubricant market. We expect company to
deliver robust top line & bottom line in FY13-14.
Particulars
(Rs in Millions)
Sep
2011
Dec
2011
Mar
2012
Jun
2012
Sep
2012 E
Dec
2012 E
Audited / UnAudited UA UA UA UA UA UA
Net Sales 1828.8 2097.8 2153.3 2169.5 1935.7 2326.5
Total Expenditure 1639 1854.8 1961 1917.4 1736.3 2044.2
PBIDT (Excl OI) 189.8 243 192.3 252.1 199.4 282.3
Other Income 13.8 9.4 34.4 12.1 14.2 11.8
Operating Profit 203.6 252.4 226.7 264.2 213.6 294.1
Interest 1.6 11.2 3.2 0 2.1 14.6
Exceptional Items 0 0 0 0 0 0
PBDT 202 241.2 223.5 264.2 211.5 279.5
Depreciation 22.6 23.6 24.8 21.6 24.1 25.6
Profit Before Tax 179.4 217.6 198.7 242.6 187.4 253.9
Tax 59.6 63.1 60 78.7 60.3 84.7
Provisions & contingencies 0 0 0 0 0 0
Profit After Tax 119.8 154.5 138.7 163.9 127.1 169.2
Extraordinary Items 0 0 0 0 0 0
Prior Period Expenses 0 0 0 0 0 0
Other Adjustments 0 0 0 0 0 0
Net Profit 119.8 154.5 138.7 163.9 127.1 169.2
Equity Capital 8.7 8.7 8.7 8.7 8.7 8.7
Face Value (IN RS) 10 10 10 10 10 10
Reserves
Calculated EPS 137.7 177.59 159.43 188.39 146.09 194.48
Calculated EPS (Annualised) 550.8 710.34 637.7 753.56 584.37 777.93
No of Public Share Holdings 642810 642810 642810 642810 642810 642810
% of Public Share Holding 73.78 73.78 73.78 73.78 73.78 73.78

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4. Charts & Graphs
i) Share holding Pattern:
Promoters share holding is 26.22% without any major change in their stake since last 3
years. FII exposure is nil where as DII exposure is negligible at 14.54%.
ii) Share Price Moving Average:
Tide Water Oil Ltd is currently trading above its 50 and 200 day price moving average.
Stock has strong support at Rs 6500-6600 levels.

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iii) Performance Chart:
Company has shown consistent growth in sales and profits year after year.
iv) Comparative Graph:
Tide Water Oil Ltd has given positive returns of 14.11% compared to Sensex returns of
3.52% in last one year.

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5. Peer Group Comparison
PEER GROUP Tide Water Oil Castrol India Gulf Oil Corp Panama Petro
CMP 7744.50 301.60 90.25 144.10
52 W H/L 8539.90/5676.10 338.00/192.53 103.50/52.25 252.50/133.00
Market Cap 6747.01 149159.66 8947.83 1242.91
Results (in Million) Jun-12 Sep-12 Jun-12 Jun-12
Sales 2169.50 7213.00 2478.85 1559.92
PAT 163.90 857.00 100.72 22.05
Equity 8.70 4946.00 198.29 86.19
EPS 662.19 8.82 5.76 23.03
P/E 11.70 34.19 15.66 6.26
6. Key Concerns / Risks
 The operating margins of the company are likely to remain susceptible to the
volatility in base oil prices and the ability of the industry to pass on cost increases
to the consumers.
 Muted growth outlook for the domestic automobile industry in the near term on
the back of rising fuel prices and high interest rates.
 Presence of a number of large players including the oil Public Sector Undertakings
(PSU) and strong private sector companies can give tough competition to the
company.
 Rise in input prices may continue to put the margins under pressure and
increasing emphasis on long drain lubes may adversely affect volume growth.

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7. Saral Gyan Recommendation
With well diversified basket of products, strong brand recognition and wide
distribution network, Tide Water Oil is well equipped to perform steadily in the
coming years. Acquisition of Veedol International Limited bestowed competitive
edge unfolding promising opportunities for the Company globally.
Tide Water Oil has already started exploring opportunities of marketing Veedol
Lubricants in foreign markets post acquisition of Veedol International Ltd. The
Company’s sub-brands such as Prima, Turbo and Take Off have also been able to
create a good will in the respective market segments. Company has already set
up a subsidiary in Dubai and is also looking at spreading business in SA, Mexico
and Germany.
New initiatives under various loyalty programmes with the dealers and the
retailers have strengthened the marketing and distribution network of the
Company. Moreover, expected prices rise of all its products by Rs. 12-14 per litre
may impact topline in near term but increase profit margins of the company.
As per our estimates, Tide Water Oil can deliver bottom line of 600 million for
full financial year 2012 – 13, annualized EPS of Rs. 690 with forward P/E ratio of
11.2 X for FY 2012-13, which makes stock relative inexpensive compared to peer
group companies.
Company has paid regular dividends to share holders since last 5 years; dividend
payout is increased from Rs. 20/share in 2008 to Rs. 120/share in 2012. Dividend
yield at CMP is 1.55%.
On small equity of Rs. 8.7 million, the estimated annualized EPS for FY 12-13
works out to Rs. 690 and the Book Value per share is Rs. 3706.97. At current
market price of Rs. 7744, stock price to book value is 2.09, which makes stock
valuations attractive with a long term view of 18-24 months.
Considering relative inexpensive valuations and opportunities in global markets for
well established & trusted brand like Veedol, we find Tide Water Oil Ltd an attractive
Pick. Saral Gyan Team recommends “BUY” on Tide Water Oil Ltd. for a target of Rs.
12,500 over a period of 18-24 months.
Buying Strategy:
 50% at current market price of Rs. 7744.50
 50% at price range of Rs. 6500 - 6800

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8. Disclaimer
Important Notice: Saral Gyan Capital Services is an Independent Equity Research Company.
Disclosure: The author of this article does not hold shares in the recommended company.
© SARAL GYAN CAPITAL SERVICES
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