STOCJK VIEW - SEAMEC LTD

  SEAMEC Ltd. Code: 526807    CMP: Rs.87.15

After a fanstastic Q4FY12, SEAMEC Ltd.  has once again reported a terrific Q1FY13 as both its revenue net profit shot up 60% to Rs.74 crore & Rs.14 crore respectively. Actually, FY12 was one of the bad years for the company due to external market conditions. It suffered a serious setback with the detention of two of its vessels by customs on arrival in Mumbai in November 2011 for want of Bill of Entry of original import. The vessels were finally released in January 2012 on order of the High Court in Bombay. This detention forced the company to bear a loss of revenue, operation costs and liquidated damages for delay in delivery of vessel for an ONGC job. Hence the overall deployment of its vessels was at 65% for the entire FY12. Further, Directorate of Revenue Intelligence (DRI) searched its offices and provisionally assessed duty of Rs.12.6 crore on repairs / modifications done outside India. The company paid the amount ‘Under Protest’ subject to adjudication. Final assessment is under process. Due to these factors, it suffered a loss of Rs.10.5 crore in FY12, which was siginificantly lower than the Rs.66.7 crore loss it suffered in FY11. Despite all such challenges, company continues to retain its debt-free status. Although its cash balance was reduced to Rs.41.6 crore by end FY12 from Rs.202.5 crore at the start, it owns and operates four multi support vessels and an additional vessel under Bareboat charter from its wholly owned subsidiary effective January 2012. One of the vessels has undergone modification / upgradation for deployment on a long term contract of 3 years with ONGC from end January 2012. Since the present situation is pretty stable, the company is expected to fare much better with a PAT of over Rs.50 crore for FY13. At the current market cap of less than Rs.300 crore it’s a screaming buy.