Overseas Acquisition Boosts Videocon Industries

Videocon Industries surged 4.90% to Rs 228 at 10:56 IST on BSE, after the company said on Friday, 19 September 2008, its overseas unit VB (Brasil) Petroleo has acquired 100% stake in EnCana Brasil Petroleo of Brazil for consideration of $165 million.

The company made this announcement during trading hours today, 19 September 2008. Meanwhile, the BSE Sensex was up 404.78 points, or 3.04%, to 13,720.38. Stocks rose across the globe on reports US policymakers will work through the weekend on a plan that will focus on dealing with illiquid assets -- the toxic source that has shattered balance sheets, pushed Lehman Brothers to file for bankruptcy protection and prompted the US bailout of American International Group this week. On BSE, 1.25 lakh shares were traded in the counter. The stock had an average daily volume of 2.31 lakh shares in the past one quarter. The stock hit a high of Rs 233.20 and a low of Rs 222 so far during the day. The stock has a 52-week high of Rs 868.65 on 1 January 2008 and a 52-week low of Rs 207 on 18 September 2008. The mid-cap stock had underperformed the market over the past one month till 17 September 2008, falling 20.31% as compared to the Sensex’s decline of 9.92%. It had also underperformed the market in the past one quarter, declining 24.75% as compared to the Sensex’s decline of 15.51%. The company’s current equity is Rs 229.45 crore. Face value per share is Rs 10. The current price of Rs 228 discounts Q3 June 2008 annualized EPS of Rs 44.49, by a PE multiple of 5.12. VB (Brasil) Petroleo is a joint venture company incorporated in Brazil equally by Videocon Industries and Bharat PetroResources, which is a wholly owned subsidiary of Bharat Petroleum Corporation. EnCana Brasil Petroleo assets include ten deep-water offshore petroleum exploration blocks in four concessions in Brazil. In August 2008, Videocon Industries’ overseas unit Videocon Energy Ventures acquired 10% stake in Mozambique’s Rovuma Offshore Area 1 block from US firm Anadarko Petroleum Corporation. Videocon Industries’ net profit rose 4.1% to Rs 255.07 crore on 18.5% increase in net sales to Rs 2612.90 crore in Q3 June 2008 over Q3 June 2007. Videocon Industries' principal activity is to manufacture and market consumer electronics and home appliances. The company also has interest in segments like crude oil and natural gas.