Premier Explosives to Buy or Sell - A Technical Perspective

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We are undertaking an analysis on Premier Explosives Limited (PEL) which happens to be one company which si going to be benefitted to a great extent with the Indianisation of Defence production and with Narendra Modi at the helm of the affairs one is going to see some big movement in the stock which is languishing around 80 levels as of May 2014. Check other Indian stocks likely to benefit with Narendra Modi govt here.

To set the ball rolling and to let the cat out of the bag is Premier Explosives Limited which is one of the major companies manufacturing the entire range of explosives and accessories for the civil requirement. Starting as a Small Scale unit in 1980, it was founded by A.N.Gupta, a Gold Medallist in Mining Engineering. Its current turnover is about Rs. 600 million per year. The export earnings of the company are about Rs. 200 million per year.

PEL is the first manufacturer in India to deploy totally indigenous technology. PEL today has the widest range of products and technologies in the manufacture of Explosives & Accessories. These include Emulsion and Slurry explosives, LD cartridge explosives, Bulk Explosives, Small-dia non-permitted explosives, Permitted explosives, Cast Boosters, Pillow-packs for secondary blasting; Detonating Fuse of various core-loads, Plain detonators, Instantaneous Electric Detonators, Electric Delay Detonators, Permitted Detonators, Cord Relays and Amardet NoN Electirc Shock-tube Detonators.

PEL has constantly innovated and upgraded its products and technology to offer “state-of-the-art” products to its valued customers both in India and abroad. Commitment to quality, Safety, Health & Environment are the way of life at PEL.

PEL’s R &D facility is recognized by the Centre for Scientific and Industrial Research (CSIR), Government of India, as an established research centre. It is also recognized as a research base for Ph.D. work by the Osmania University, Andhra Pradesh.

The wide distribution network comprising of magazines Consignment Agents, Dealers and Handling Agents, located across the country, ensure ready stock and prompt delivery to customers even in remote locations.

There is a team of highly experienced and qualified sales and Technical Service engineers to provide full support on applications, safety and handling of explosives and accessories to customers. This is backed by a team of export mining/blasting engineers at the Technical Services group located at headquarters.

Apart from providing regular support services to customers, PEL also undertakes complete drilling & blasting contracts in collaboration with associates having resources of drilling and excavation equipment & manpower.

Product range of the company includes:

• Plain Detonators
• Instant Electric Detonators
• Copper Electric Detonators
• Copper Delay Detonators
• Short Delay Detonators
• Ling Delay Detonators
• Cord Delay Detonators
• Ultra Safe Green Detonators
• Seismic Electric Detonators
• Non Electric Detonators
• Detonating Cord - Premier Cord is a reliable, flexible, waterproof fuse with high tensile strength and abrasion resistance. It is an ideal means of transmitting detonation to an explosive charge
• Manufacturers of the entire range of Explosives and Accessories in India.

Milestones

• Incorporation of Company 14th Feb. -1980
• Start of Explosives Production  -1980
• Start of Detonating Fuse Production -1984
• Start of Detonators Production -1990
• Start of Bulk Explosives Production -1991
• Recognition of R&D centre by Department of Science & Technology, Government of India -1993
• Start of Mushrooms production -1997
• ISO Certification -2001
• Mr. A.N.Gupta  appointed as Chairman, Explosives Dev. Council, Min. of Commerce, Govt. of India -2002
• CE Certification for Detonating Cord -2003
• Start of Premier Research Development Centre -2004
• Start of Special Products Division -2006
• CE Certification for Detonators -2007
• Hive off of Mushroom division -2007
• Operation & Maintenance Contract with SHAR -2007
• Start of backward integration unit as a subsidiary Company “Premier Wire Products Limited” for manufacture of G.I. Wire. Company started commercial production on 13.02.2009
• Achievements/ recognition:
• Best R & D effort Award for the year 2006 from All India Manufacturers Association (Andhra Pradesh State Board)  2007
• Highest rating in the ranking of India’s Top 500 Manufacturing Small and Mid sized company rating  2007
• “Industry Appreciation” Award by NSTL, Vizag.  2007
• “Best Greenery Development” award from Andhra Pradesh Pollution Control Board (PEL-PDK)  2006
• “Certificate of Appreciation” by Rotary Club of Secunderabad to Mr.A.N.Gupta for Drinking Water Project & organizing Medical Camps at remove villages  2006
• “Best Technology Development” in R&D Award for the year 2004-05 by Federation of Andhra Pradesh Chambers of Commerce & Industry (FAPCCI), A.P. 2006
• “Best Greenery Development” award from Andhra Pradesh Pollution Control Board (PEL-PDK)  2004
• Certificate of Export Recognition by Chemicals & Allied Products Export Promotion Council 2004
• Mr.A.N.Gupta CMD elected President of Explosives Manufactures Association of India.  2003
• “Best Industrial Relations” award received from Labour Department, Govt. of A.P. (PEL-GDK) 2003
• Mr.A.N.Gupta CMD appointed as Chairman of Explosives Development Council by Ministry of Commerce & Industry, Govt. Of India.  Feb. 2002.
• Best Export performance award by VSEZ Vishakapatnam Special Economic Zone (VSEZ) 2001-2002
• “Best Industrial Relations” award received from Labour Department, Govt. of A.P. (PEL-GDK)  1989

Verdict

We see potential in the company and see a fair price of Rs 300 in a matter of One year and thus it can be a aprt of the long term bet and if you are a long term investor; then you can not afford to miss the long term calls here.