MOSL: ALLCARGO LOGISTICS (Buy)-MTO performance improving steadily-Higher provision impacts P&E
​Allcargo Logistics: MTO performance improving steadily; Higher provision impacts P&E
(AGLL IN, Mkt Cap USD0.6b, CMP INR161, TP INR212, 32% Upside, Buy)
- PAT beat led by higher other income, lower tax: 1QFY18 revenue increased 6% YoY to INR14.83b (higher than estimate) due to higher revenue from MTO segment. EBITDA declined 23% YoY (-2% QoQ) to INR1.03b (10% miss) due to lower-than-estimated EBIT from P&E segment on higher provision. Adj. PAT came in at INR630m (est. of INR643m; +1% YoY, +6% QoQ), led by higher other income of INR159m (+169% YoY, +7% QoQ) and a lower tax rate of 11% (vs 29.1% in 1QFY17).
- MTO reports healthy volume growth: MTO volumes grew 14% YoY to 138,479 TEUs in 1QFY18, led by growth across geographies due to higher penetration. EBIT margin contracted to 4.1% from 4.3% in 4QFY17 due to currency impact. Revenue increased 9% YoY to INR12.9b due to strong volume growth. Margin is likely to improve due to the lagged effect of better container freight rates.
- CFS profitability stable: CFS volumes stood at 78,732 TEUs (like-to-like growth of 2% YoY), led by higher volumes in Mundra CFS. EBIT margin contracted ~0.7bp YoY due to lease rentals of Kolkata CFS and expenses related to new CFS at Mundra.
- P&E segment bottoms out: P&E revenue fell 25% YoY due to sale of unproductive assets and maintenance of one of the ships. P&E segment reported EBIT of INR-1m v/s INR180m in 1QFY17, led by non-operation of assets due to repairs and the sale of low-yielding non-strategic assets.
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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