MOSL: ALLCARGO LOGISTICS (Buy)-P&E remains a drag
ALLCARGO LOGISTICS: P&E remains a drag
(AGLL IN, Mkt Cap USD0.4b, CMP INR111, TP INR130, 17% Upside, Buy)
GATI’s acquisition to provide synergies
- AGLL’s third-quarter result highlights the moderate performance of MTO and the weaker performance of CFS and Project and Engineering (P&E) businesses. The new logistics park business has started gaining traction.
- We maintain our FY20/21 estimates and Buy Moreover, the acquisition of GATI will provide AGLL an entry into distribution logistics.
Miss on PAT led by higher tax rate
- Reported revenue was down 1% YoY at INR17.8b (our estimate: INR19.5b).
- Reported EBITDA increased 12% YoY to INR1.26b (our estimate: INR1.37b), with the margin at 7.1% (v/s 6.3% in 3QFY19).
- The group has adopted Ind-AS 116 "leases" with effect from 1st Apr’19 using the modified retrospective method. This lowered PAT by INR15.5m.
- The company booked exceptional items of (a) INR463m on gain arising on the sale of SEIS scrips and (b) INR154.9m as transaction cost for the transfer of warehouses and other assets of the logistics park business to subsidiaries.
- Hence, adj. PAT was down 65% YoY at INR166m (our estimate: INR672m).
- AGLL has acquired a 20.83% equity stake in GATI and deposited INR2,380.7m in an open offer escrow account.
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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