Savita Oil Technologies: Undervalued midcap in a competitive space?

Hi @tankerooooo, thanks for your response.

1. See Note 22 in the annual report for the breakdown (pg 130). Interest includes forex losses, bank charges, etc.

Actually I did look at this and it didn’t clarify much for me. If you look at the 3 items in Other borrowing costs

1. Interest – On what? Doesn’t explain anything
2. Net loss on currency fluctuation – For this to reflect as an interest cost there has to be some foreign currency denominated loans. There are no loans on the B/S
3. Other borrowing costs & bank charges – There has been no borrowing in the last 3 years as per the balance sheet and cash flow statements. So what borrowing costs are they talking about?

Let me try to get an answer from the IR team on this.

1. My assumption is that these transactions are related to the acquisition of Savita Polymers in 21-22. Savita Polymers was a promotor controlled entity.

Thank you! This is the explanation. Acquisition was done at 1x Sales and ~13x P/E, on the face of it looks like it was done at arm’s length.

Since you are holding the stock and following the business for some time, can you throw some light on the following :

1. Management quality and corporate governance – How have the promoters been in this regard?

2. Management seems to be excited about the prospects of synthetic ester in the transformer oil business. Do you have any insights on this product’s potential in the future?

Stock price seems to be fairly correlated with crude oil movements as expected. Margins go up and down with crude prices.