HomeMarket NewsStocks NewsThis shipping stock is the only one to deliver 140% returns, strong earnings this year

This shipping stock is the only one to deliver 140% returns, strong earnings this year

The marine services company has been reporting extraordinary earnings and returns amongst its peers in the sector, in 2019.

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By Mousumi Paul  December 18, 2019, 3:36:19 PM IST (Published)

This shipping stock is the only one to deliver 140% returns, strong earnings this year
One stock that no one has been talking about is Seamec Limited. The marine services company has been reporting extraordinary earnings and returns amongst its peers in the sector, in 2019. In fact, the most attractive aspect of this company is its inexpensive valuations.


The company’s P/E currently stands at 8.45x v/s industry average of 19.85x, which stands as a classic case of an "attractively valued stock". In terms of returns, Seamec has delivered the best returns so far in its respective sector. On a year-to-date basis, the company has risen 147 percent, while in the last 5 years, the stock has given 382 percent returns.

Coming to the earnings front, in Q2FY20, the company's sales jumped 130 percent on a year-on-year basis (YoY). The net profit climbed even higher, by 256 percent YoY. On a year-to-date basis, the sales in September 2019 rose 85 percent YoY while the net profit rallied 1,562 percent YoY.

Seamec is engaged in the business, inter alia, of operation of multi-support vessels for underwater/sub-sea engineering services, deep-sea diving, an inspection of underwater structures, rescue operations and firefighting.

In its recent BSE filing, the company reported that its charter hire of vessel ‘Seamec III’ with ONGC has been concluded on December 4. In fact, on a regular basis, most of the Seamec’s vessels are being hired by ONGC.

The company, in its FY18 annual report, said, "During the global downturn experienced over the last decade, there has been a distinctive mismatch between cost and yield in the oil and gas exploration. The oil majors had made a cautious approach and discouraged their spending on capex. However, it has raised expectations for sustainable growth in offshore exploration and production activities, thus opened up opportunities for service providers.”

Coming to India, ONGC has resumed its investment plan in exploration, production activity and development of existing fields to meet energy security. Thus opportunities cropped up for service providers line of business with great assurance for the deployment of vessels, it added.
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