Company: Allcargo Global Logistics Ltd.
Industry: Transport – Road
CMP and PE Ratio: Rs. 787.3 with a PE ratio of 18.2
Peer Companies for Allcargo Global Logistics Ltd: Transport Corporation of India Ltd and Container Corporation of India Ltd.Valuation of Allcargo Global Logistics Ltd compared to peers: Allcargo looks relatively expensive when compared strictly on a PE basis with its peers.
Financial Analysis:
- Income Statement: The company has shown robust topline and bottomline growth over the past few years. The operating, gross and net profit margin for the company has also improved over this period. The FY 08 EPS of the company stood at Rs. 43.2
- Cash Flow: Allcargo has generaged positive operating cash flow and also made significant capital expenditure in the past few years. The FY 07 free reserves per share of the company was at Rs. 178.50.
- Balance Sheet: As of December 2007, the company had good reserves and a very low debt making the balance sheet look attractive and healthy. The book value per share as on 31st December 2007 for Allcargo stood at Rs. 188.50 per share.
Business Analysis:
- As of 31st December 2007 the main revenue generators for the company were (a)Mutimodal Transport Operations – 67.12% revenue (b) Container Freight Station – 25.85% revenue (c) Service (Freight & Hire Charter) – 6.68% revenue and Other Services -0.33%.
- The logistics industry growth has a very high positive correlation with the economic growth. Thus, in my opinion the company will see some slowdown in its revenue in the near term. The low crude oil prices will benefit the company in many ways but the global slowdown will take its tool on the logistics industry as well.
- On a long term basis I would say that the logistics industry in India will really make it big. Players like Allcargo, CONCOR and others will see their business grow several times from what it is now.
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