MOSL: ALLCARGO LOGISTICS (Buy)-Margins stable YoY-P&E segment records positive EBIT
Allcargo Logistics: Margins stable YoY; P&E segment records positive EBIT
(AGLL IN, Mkt Cap USD0.4b, CMP INR106, TP INR142, 34% Upside, Buy)
- Margins remain stable YoY: Overall revenue increased 22% YoY to INR18.03b v/s our estimate of INR16.6b, led by 22% YoY growth in the MTO segment and 25% growth in the CFS segment. EBITDA increased 20% YoY (-10% QoQ) to INR1.12b, lower than our estimate of INR1.25b. Margins stood at 6.2% (6.3% in 3QFY18). PAT increased 37% YoY to INR477m v/s our estimate of INR642m as the tax rate stood at 38% in 3QFY19 v/s our estimate of 24% (39% in 3QFY18).
- Project & Engineering (P&E) segment records positive EBIT: (a) MTO volumes increased 16% YoY to 1,67,978 TEUs. Revenue rose 22% YoY to INR16.23b due to volume growth across key markets. EBIT margin declined 0.46pp YoY (-0.71pp QoQ) to 3.7%. (b) CFS volumes increased 15% YoY to 82,319 TEUs. Revenue rose 25% YoY to INR1.18b. EBIT margin expanded ~0.3pp YoY (-3.19pp QoQ) to 29.8%. (c) P&E revenue increased 12% YoY to INR798m. P&E reported EBIT of INR30m as against loss of INR109m in 3QFY18.
- Management commentary: (1) MTO volumes continued to grow 16% YoY despite slow growth in global macro environment. Volumes from allied and FCL services continued to grow, (2) Volumes surged 15% YoY for CFS, driven by Kolkata and Chennai operations, and (3) The P&E segment witnessed Improved utilization, driven by Wind and the Power Sector.
Allcargo Logistics Limited is an India-based holding Company. The Company is engaged in providing integrated logistics solutions. It offers logistics services across multimodal transport operations, inland container depot, container freight station operations, contract logistics operations, and project and engineering solutions. Its segments include Multimodal Transport Operations, which involves non-vessel owning common carrier operations related to less than container load consolidation and full container load forwarding activities; Container Freight Stations (CFS)/Inland Container Depot (ICD) Operations, which is involved in import/export cargo stuffing, de-stuffing, customs clearance and other related ancillary services, and Project & Engineering Solutions (P&E), which provides integrated end-to-end project, engineering and logistic services through a fleet of owned/rented special equipment, such as hydraulic axles, cranes, trailers, barges, reach-stackers, forklifts and ships.
Motilal Oswal Financial Services Ltd. is a reputed name in Financial Services and Online Trading with group companies providing services such as Private Wealth Management, Retail Broking and Distribution, Institutional Broking, Asset Management, Investment Banking, Private Equity, Commodity Broking, Currency Broking, Principal Strategies & Home Finance.
Motilal Oswal Securities is a group company of Motilal Oswal Financial Service Limited which started as a stock trading company and has blossomed into well diversified firm offering a range of financial products and services. Motilal Oswal has built a reputation as the source for best stock trading company and this has taken a wealth of experience, knowledge and expertise, constantly working in tandem, over the years.
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