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BL Research Bureau

Apar Industries’ tie-up with Italian oil giant ENI is likely to strengthen earnings prospects and aid diversification of its product basket.

The agreement, apart from enabling Apar to introduce AGIP branded automotive, industrial and marine lubricants in the country, will allow to blend these lubricants in its plants.

This venture may unearth significant potential for the company. One, it could help Apar leverage on the AGIP’s brand value to gain a foothold in the high-end automotive lubricant market.

In this context, the entry of many global automakers into India as well as the fact that AGIP engine and transmission oils are approved by most of the international car manufacturers points to strong prospects.

Two, this foray is also likely to help Apar diversify and broadbase its product portfolio.

Apar is the country’s largest manufacturer of transformer oils and the second largest manufacturer of power transmission lines and conductors.

The company offers a wide range of transformer oils to major global utilities and power generators.

Not surprisingly, investor interest in this company, which offers a proxy play on growth in power transmission and distribution, has risen considerably over the recent past; the stock has gained 46 per cent over the last month.

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