Confidence Petroleum Jumps into Spotlight After Securing ₹42 Cr PSU Order; Here’s Why Investors Are Watching This Oil Stock Closely
Introduction
Confidence Petroleum : Confidence Petroleum India Ltd, a key player in the LPG and CNG segment, is back in the limelight after announcing a significant ₹42.09 crore bottling contract from major public sector oil giants — Bharat Petroleum Corporation Ltd (BPCL), Hindustan Petroleum Corporation Ltd (HPCL), and Indian Oil Corporation Ltd (IOCL). The deal has rekindled investor interest in the stock, which has otherwise seen a steep correction from its 52-week high.
This latest order win is being seen as a positive development for the company’s long-term revenue visibility and market credibility. Let’s dive deeper into the company’s business, financial performance, and why this stock deserves a closer look from investors.
₹42 Cr Contract with PSU Giants
On Friday, Confidence Petroleum announced via a regulatory filing that it has secured a major LPG bottling assistance contract with three major oil marketing companies:
- BPCL – Bottling of 3 lakh cylinders over 10 years at Kollam
- HPCL – Bottling of 1.2 lakh cylinders over 10 years at Trivandrum
- IOCL – Bottling of 90,000 cylinders over 3 years at Murbad
This contract is valued at ₹42.09 crore and is expected to enhance the company’s operational capacity and long-term earnings consistency. The strategic locations of the bottling units also indicate the company’s growing penetration in southern and western India.
A Glance at Confidence Petroleum
Confidence Petroleum operates through two divisions — Cylinder Division and LPG Division. It is engaged in manufacturing and distributing LPG and CNG cylinders, operating auto LPG dispensing stations, and providing LPG bottling services across India. The company markets its offerings under the GoGas brand, targeting industrial, commercial, and retail segments.
Despite recent stock price volatility, the company has built a strong infrastructure base and customer trust with consistent PSU contracts and expanding dealer networks.
Stock Performance Snapshot
The stock is currently trading at ₹50.4 per share, sharply down by 48.73% from its 52-week high of ₹98.50. However, over the past 5 years, it has delivered a return of 158%, reflecting its long-term growth potential.
Financial Performance Overview
| Financial Metric | FY24 | FY25 | YoY Change |
|---|---|---|---|
| Consolidated Revenue | ₹2,698 Cr | ₹3,146 Cr | ▲ 16.60% |
| Net Profit | ₹105 Cr | ₹91 Cr | ▼ 13.33% |
| Return on Equity (ROE) | – | 6.87% | – |
| Return on Capital Employed | – | 9.48% | – |
| Price-to-Earnings Ratio (P/E) | – | 19.52x | Below industry avg |
| Industry P/E Average | – | 22.20x | – |
Valuation & Ratios
| Parameter | Value |
|---|---|
| Market Cap | ₹1,675 Cr |
| Current Price | ₹50.4 |
| 52-Week High / Low | ₹98.5 / ₹44.8 |
| P/E Ratio | 19.4x |
| Book Value | ₹40.0 |
| Dividend Yield | 0.20% |
| ROCE | 9.48% |
| ROE | 6.87% |
| Face Value | ₹1.00 |
Growth Outlook
Although net profit dipped in FY25, the double-digit growth in revenue and ongoing government-backed contracts show the business is operationally sound. With India’s push for cleaner fuels and LPG adoption in rural areas, Confidence Petroleum is well-positioned to benefit from long-term structural tailwinds.
Why Investors Should Keep This Stock on Radar
- PSU Contracts = Stability: Long-term agreements with BPCL, HPCL, and IOCL reinforce the company’s reliability and service capabilities.
- Pan-India Presence: The company’s bottling plants and GoGas outlets are growing, ensuring better distribution and visibility.
- Affordable Valuation: Trading at a P/E lower than the industry average, the stock offers decent value compared to peers.
- Upside Potential: After a 48% correction, the stock offers a favourable entry point for long-term investors.
🔍 Key Q&A From This Article
Q1: Why is Confidence Petroleum in focus recently?
A: The company secured a ₹42.09 crore LPG bottling contract from BPCL, HPCL, and IOCL, sparking investor interest.
Q2: What does the new contract include?
A: Bottling assistance for 3 lakh cylinders for BPCL (10 years), 1.2 lakh for HPCL (10 years), and 90,000 for IOCL (3 years) at different locations.
Q3: How has the stock performed recently?
A: It’s down 48.73% from its 52-week high, currently trading at ₹50.4, but it has delivered 158% returns over the last 5 years.
Q4: What were the company’s financials in FY25?
A: Revenue grew 16.6% to ₹3,146 Cr, while net profit declined 13.33% to ₹91 Cr.
Q5: Is the stock undervalued?
A: Yes. It’s trading at a P/E of 19.4x, below the industry average of 22.2x, making it a potentially undervalued pick.
Q6: What are the company’s core businesses?
A: LPG/CNG cylinder manufacturing, auto LPG stations, and LPG bottling services, marketed under the GoGas brand.
Q7: Should long-term investors consider this stock?
A: With a growing footprint and strong PSU backing, the stock offers long-term potential at a reasonable valuation.
Conclusion
Confidence Petroleum India Ltd’s latest PSU order has brought it back under the spotlight. Despite a recent correction, the fundamentals, improving revenue trajectory, and PSU trust make this a compelling mid-cap stock to monitor. As India continues its energy transition, companies like Confidence Petroleum could play a central role, offering both operational growth and shareholder value.
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