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Showing posts with label ONLINE SHOPPING. Show all posts
Showing posts with label ONLINE SHOPPING. Show all posts

Sunday, February 23, 2014

TRANSPORT CORPORATION OF INDIA LTD : AN LEADER IN LOGISTICS !!!

Scrip Code: 532349 TCI
CMP:  Rs. 90.10; Buy at current levels. Short term Target Rs. 100.00 ; Medium to Long term Target: Rs. 300; STOP LOSS – Rs. 82.90; Market Cap: Rs. 657.12 Cr; 52 Week High/Low: Rs. 110.35 / Rs. 43.95
Total Shares: 7,29,33,180 shares; Promoters : 5,05,94,440 shares – 69.37 %; Total Public holding : 2,23,38,740 shares – 30.63 %; Book Value: Rs. 55.51; Face Value: Rs. 2.00; EPS: Rs. 7.59; Dividend: 50.00 % ; P/E: 11.87 times; Ind. P/E: 15.50; EV/EBITDA: 6.18.
Total Debt: 290.36 Cr; Enterprise Value: Rs. 931.61 Cr.

TRANSPORT CORPORATION OF INDIA LIMITED: Transport Corporation of India Ltd was founded in 1958 and is based in Gurgaon, India. It was formerly known as TCI Industries Limited and changed its name to Transport Corporation of India Ltd in October 1999. Transport Corporation of India Ltd was founded in 1958 and is based in Gurgaon, India. Transport Corporation of India Ltd provides integrated supply chain and logistics solutions primarily in India. TCI came with an IPO in May 1975 with 4,80,000 equity shares of face value of Rs. 10 each offered at a premium of Rs. 10 per share. The company’s Freight division offers surface transport solutions for full truck load, less than truck load, and small and over-dimensional cargo through road and rail. Its XPS division provides door-to-door express distribution services by air, surface, and rail. The company’s Supply Chain Solutions division offers services for Auto, Retail, Telecom, Electricals, Pharmaceuticals, FMCG, and Cold Chain sectors. Its Global division provides logistics services comprising freight forwarding, custom clearance, express and courier, warehousing, transportation, and supply chain consultancy services. The company’s Seaways division provides ship management, liner, charter, agency, project handling, multi-modal, and transportation services, including container and bulk cargos from islands and ports. TCI was the first to launch several solutions in the logistics field. Its product offering includes TCI Freight, TCI XPS, TCI Supply Chain Solutions, TCI Global Logistics, TCI Seaways and TCI Foundation. The company also has two JV’s - Transystem International Pvt Limited (TLI) a joint venture between TCI and Mitsui & Co Ltd which is the sole logistics partner for Toyota Kirloskar Motors Ltd in India. TLI has been providing complete logistics solutions, from inbound transportation from suppliers across India and other countries to outbound transportation of complete built units (CBU) & spares. TCI’s second JV is Infinite Logistics Solutions Pvt Ltd (ILSPL) this JV is with CONCOR for bulk multi-modal logistics solutions by Rail and Road. TCI Limited is locally compared with Container Corporation of India Ltd, GATI India Ltd, Gateway Distriparks Ltd, Ruchi Infrastructure Ltd, Kesar Terminals & Infrastructure Ltd, Shreyas Shipping & Logistics Ltd, Blue Dart Express Ltd, Patel Integrated Logistics Ltd, Global Vectra Helicorp Ltd, SICAL Logistics Ltd and Globally compared with S Line Company Ltd of Japan, Keihin Co., Ltd of Japan, Okayamaken Freight Transportation Co., Ltd of Japan,  FedEx Corp of USA, Royal Mail Plc of London, Postal Services mail Plc of London, Deutsche Post AG of Germany, PostNL N.V. of Netherlands, Hanjin Transportation Co., Ltd of South Korea, Pos Malaysia Berhad of Malaysia, Singapore Post Ltd of Singapore, Yusen Logistics Co Ltd, Hyundai Glovis Co Ltd of Korea, Atlas Air Worldwide Holdings of USA, Bpost NV-SA Brussels, Belgium, Kintetsu World Express Inc of Japan, UPS – United parcel Service Inc of USA, Fedex Corp of USA, Air transport Services Group of Ohio, Hub Group Inc of Illinois, Xpo Logistics Inc of USA, Echo Global Logistics Inc of Illinois, Uti Worldwide Inc of British Virgin Islands,  Chichibu Railway Co., Ltd of Japan, Kobe Electric Railway Co., Ltd of Japan, Keifuku Electric Railroad Co., Ltd.

Investment Rationale:
Transport Corporation of India (TCI) is India’s leading integrated logistics and supply-chain solution provider, offering single-window integrated services, backed by strong multi-mode transport operations by road, rail, sea and air. The company operates in high growth segments such as express cargo & supply chain solutions. TCI has progressed from being a One Man, One Truck, One Office set up to an extensive setup of 1000 + IT enabled offices and having a fleet of 7,000 trucks, trailers, 4 cargo ships and has reefer vehicles with a skilled workforce of 6,500 with offices in 4 countries, with an managed warehouse space of 9.75 million sq. ft., and has an ability to make deliveries in 200 countries. Today, TCI moves about 2.5 % of India’s GDP by value and is also a part of World Economic Forum’s Community of Global Growth Companies. The logistics sector presents an incredible arena of opportunity because, nearly 90 % of the market is still controlled by the unorganized sector. The size of the logistics market is just $230 billion and it is expected to grow at about 15 % CAGR for next several years, so there is no dearth of opportunity for companies seeking to bring some cost and time saving innovation to this field. The expectation of FDI in E- Commerce will be allow big-ticket MNC’s to set up JV’s so as to tackle supply-chain constraints and logistics and this makes this sector an attractive bet. The buzz on the news is that the top brass in the Government is keen to allow foreign direct investment in retail e-commerce before the end of FY 2014 and TCI, being one of the oldest players in the logistics sector with its strong distribution network across the length and breadth of the Country will definately benefit TCI . Financially, TCI has been doing well. Its ROCE is above 16 % over the past five years, TCI’s top-line has been growing at a CAGR of about 11 % while the operating profits have grown at a CAGR of about 14 %. Transport Corporation of India reported Q3FY14 numbers with revenues growing at 3 % QoQ and 4.7 % YoY to Rs. 515 crore whereas its EBITDA showed a robust growth of 14.6 % QoQ and 9.4 % YoY to Rs. 37.6 crore. Improvement in EBITDA was due to expansion in EBITDA margin by 73 bps QoQ & 32 bps YoY to 7.3 %. Consequently, PAT in the quarter also improved significantly by 10 % QoQ and 27 % YoY to Rs. 14.4 crore. Going ahead, as the focus shifts towards better margin segments like express and supply chain, it is believed that these segments will propel TCI to place itself on a higher growth orbit. TCI plans to spend Rs. 100 Cr on capex by FY15 and see's a revenue growth of 15 % by FY15 .

Outlook and Valuation:
Transport Corporation Of India Ltd has a Global division which provides logistics services comprising freight forwarding, custom clearance, express and courier, warehousing, transportation, and supply chain consultancy services. It has a strong vertical integration and have been gaining market share because unorganised players find it difficult to operate due to high wage cost and other procedural hurdles. TCI has shown a strong recovery driven by its supply chain and express segment, this division’s revenues grew significantly as the freight segment continued to decline. On an EBIT basis, SCS and express segment posted growth of 17 % and 26 % QoQ to Rs. 7.5 crore and Rs. 12.1 crore, respectively. Going ahead, it is believed that SCS and express segments possess massive growth potential. With revenue contribution getting skewed towards SCS and express segment from freight division, it is believed that the margins will improve further, going ahead. Also, as SCS and express businesses are highly EPS accretive as against its freight segment, and it can be anticipated that it can post an earnings CAGR of 13 % over FY14E-16E against CAGR of 11 % over FY11-13. The freight segment revenue growth remained flattish YoY to Rs. 194 crore whereas its contribution to total sales for Q3FY14 declined to 38 % from 39 % in Q2FY14. Further, at the EBIT level, the freight segment contributes a meagre Rs. 0.7 crore. However, the strong pick-up in SCS and express segment revenue by 11 % and 6 % YoY, respectively, supported total revenue growth of 4.6 % YoY. Another heartening factor has been the shift of revenue mix towards high return SCS and express business leading to contribution from these segments to 28 % and 30 %, respectively, for Q3FY14. Further, the shipping segment continues to contribute in the range of around 5 – 6 % to revenue for the quarter posting growth of 28 % YoY. There is a conscious effort to shift the business mix from the low margin freight business to the high margin SCS and XPS business over a long period to improve the EBITDA margin of the company. TCI is trading at a P/E of 13 times, which is not expensive when you compare it with the P/E of its peers like Gateway Distriparks which trades at 9 x, Container Corporation at 15 x, AllCargo Logistics at 7.5 x, Blue Dart at 40 x etc. At the current market price of Rs. 90.10, TCI is trading at a PE of 10.98 x FY14E and 9.58 x FY15E respectively. The company can post Earnings per share (EPS) of Rs. 8.20 in FY14E and Rs. 9.40 in FY15E. One can buy TCI with a target price of Rs. 100 for the shorter term and for Medium to Long term investment it would be Rs. 300.00. 

KEY FINANCIALSFY13FY14EFY15EFY16E
SALES ( Crs)2,130.502,053.002,195.802,415.90
NET PROFIT (₹ Cr)69.5059.4068.1086.00
EPS ()9.508.209.4011.80
PE (x)9.6011.309.807.80
P/BV (x)0.200.200.200.20
EV/EBITDA (x)5.406.205.504.80
ROE (%)15.9012.3012.7014.10
ROCE (%)25.1019.2019.7021.20

I would buy TRANSPORT CORPORATION OF INDIA LTD for Medium to Long term for target of Rs. 300 and for the shorter term the target would be Rs. 100.00. As I always say, I am a long term believer in markets & I do respect the markets and will keep a strict stop loss of ₹ 82.90 on every purchase(Why Strict stop loss of 8 % ?) - Click Here

READ HERE TO KNOW MORE ON LONG TERM INVESTING - CLICK HERE

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Monday, February 3, 2014

GATI INDIA LTD : PICKING UP SPEED !!!

Scrip Code: 532345 GATI
CMP:  Rs. 62.30; Accumulate between Rs. 55.00 to Rs. 59.00 levels and at every dipps.

Medium to Long term Target Rs. 74; Short term Target: Rs. 65; STOP LOSS – Rs. 56.22; Market Cap: Rs. 539.40 Cr; 52 Week High/Low: Rs. 68.40 / Rs. 22.65.
Total Shares: 8,65,82,287 shares; Promoters : 3,28,88,430 shares – 37.99 %; Total Public holding : 5,36,93,857 shares – 62.01 %; Book Value: Rs. 97.19; Face Value: Rs. 2.00; EPS: Rs. 3.01; Div: 00.00 % ; P/E: 20.69 times; Ind. P/E: 40.76; EV/EBITDA: 8.10.
Total Debt: 375.94 Cr; Enterprise Value: Rs. 868.87 Cr.

GATI INDIA LIMITED: GATI INDIA LTD was incorporated in 1989, and is based in Secunderabad, India. Gati Limited provides express distribution and supply chain solutions to business customers in various industry verticals in India and internationally. GATI offers air, road, ocean and rail transportation services, surface cargo movement services for shipments, parcel train services, air movement services for non-commercial shipment, secure box and desk to desk services, art pieces packaging and transporting services and Student Express service for transporting luggage. It also provides managed, temperature sensitive, re-engineering, and upstream supply chain management services, cold chain transportation solutions by air, road, and ocean freight forwarding services, road and air movement to SAARC nations, warehousing solutions, customs clearance and in bound and out bound courier services. In addition, the company offers shipping services, such as break-bulk cargo, container, non-vessel operator container carrier and route services as well as project cargo services to oil and gas, pulp and paper, automotive, construction, power and energy and other shipments. Further, its e-commerce business provides services through e-hubs or e-fulfilment centres as well as owns online shopping portal for vendors to register and sell their products. Additionally, the company operates four fuel stations that deals in petrol, diesel, lubricants, etc. It operates a fleet of approximately 4,000 on road vehicles and 2 marine vessels. Gati has offices in China, Singapore, Bhutan, Dubai, Hong Kong, Thailand, Nepal and Sri Lanka and has plans to foray into other markets. Its Subsidiaries includes – Gati Holdings Ltd, Gati Asia Pacific Pte. Ltd, Gati Hong Kong Ltd, Gati China Holdings Ltd, Gati Cargo Express (Shanghai) Co. Ltd, Gati Japan Ltd, Gati Middle East Fze. Ltd, Newatia Commercial & Trading Pvt. Ltd, Trymbak Commercial & Trading Pvt. Ltd, Ocimum Commercial & Trading Pvt. Ltd, Sumeru Commercial & Trading Pvt. Ltd, Kausar India Ltd, Zen Cargo Movers Pvt. Ltd, Gati Import Export trading Ltd, Gati Skyways Ltd. GATI INDIA Limited is locally compared with Container Corporation of India Ltd, Gateway Distriparks Ltd, Transport Corporation of India Ltd, Ruchi Infrastructure Ltd, Kesar Terminals & Infrastructure Ltd, Shreyas Shipping & Logistics Ltd, Blue Dart Express Ltd, Patel Integrated Logistics Ltd, Global Vectra Helicorp Ltd, SICAL Logistics Ltd and Globally compared with Royal Mail Plc of London, Postal Services mail Plc of London, Deutsche Post AG of Germany, PostNL N.V. of Netherlands, Hanjin Transportation Co., Ltd of South Korea, Pos Malaysia Berhad of Malaysia, Singapore Post Ltd of Singapore, Yusen Logistics Co Ltd, Hyundai Glovis Co Ltd of Korea, Atlas Air Worldwide Holdings of USA, Bpost NV-SA Brussels, Belgium, Kintetsu World Express Inc of Japan, UPS – United parcel Service Inc of USA, Fedex Corp of USA, Air transport Services Group of Ohio, Hub Group Inc of Illinois, Xpo Logistics Inc of USA, Echo Global Logistics Inc of Illinois, Uti Worldwide Inc of British Virgin Islands,  Chichibu Railway Co., Ltd of Japan, Kobe Electric Railway Co., Ltd of Japan, Keifuku Electric Railroad Co. Ltd.

Investment Rationale:
Gati Limited is a pioneer and leader in the Express Distribution and Supply Chain Solutions in India. It was the revolutionary approach adopted by Gati that helped launch many path-breaking initiatives in the logistics segment and many were the firsts for the Indian market. Having started as a cargo management company in 1989, Gati has grown into an organization with more than 3,500 employees and covering 603 out of 611 districts in India. The logistics sector presents an incredible arena of opportunity because nearly 90 % of the market is still controlled by the unorganized sector. The size of the logistics market is just $230 billion and it is expected to grow at about 15 % CAGR for next several years, So there is no dearth of opportunity for companies seeking to bring some cost and time saving innovation to this field. Gati has joined with Kintetsu world Express, Japan's leading logistics service provider and formed GATI-KWE which is an unmatched leader in express distribution & Supply chain Solutions in this sector. GATI's Express Distribution & Supply chain (EDSC) business has been transfered to the joint venture company through a business transfer agreement between Gati and KWE wherein KWE has invested around Rs. 267.70 Cr in the JV for its 30 % stake. Gati’s announced a dedicated Shipping route service between Chennai -Yangon - Chennai which will help businesses to maximize trade potential between the two countries. Gati Kausar is expected to expand its Reefer fleet (Refrigerator fleet) size to 350 by the year 2015. GATI Kausar business strategy is to focus on primarily organize retail logistics including food chains, pharmaceuticals, dairy products, agro products and FMCG. The Company is setting up its own cold storage units and plans to develop customized cold storage units to cater to temperature sensitive products. Company’s GATI E commerce business focuses on B2C and C2C segments and is expanding its the capacity size to cater to 30,000 home delivery per day in FY 13. GATI E commerce caters to some of the top notch large online retailers, home shopping channels and provides franchisee solution to multinational brands. Gati has over 4,000 vehicles on road, fleet of refrigerated trucks, container vessels and world class mechantronic warehousing facilities across India. Gati plans to capture logistic demand by strengthening its Road network by way of greater automation and better material handling facilities by introducing the market with Multimodal plus products that have better transit times, Gati's Premium plus is a product offered between air, road and rail, such connectivity to the network and independently focusing on the growing market for the demand of Cold Chain Solutions, e Commerce and International Freight forwarding will surely benefite Gati as an first mover advantage. We may also see that E Shopping is going through an revolutionary changes with an offering of Same Day Shipping and Free Returns to their customers, many retailers are competing to offer the fastest delivery on time or adding an enhanced services such as improved courier services. Recently, an online shopping major announced that it will deliver its orders on same day in US which gives consumers a faster and improved shopping experience. With such intense competetions among online retailers to offer better and faster services, delivery becomes an key and is increasingly becoming a way for retailers to stand out from their competitors and there's were the companies like Gati play an pivotal role, Gati being market leader in logistics will sooner or later would be beneficiary from the online shopping platform.

Outlook and Valuation:
Gati Limited is a pioneer and leader in the Express Distribution and Supply Chain Solutions in India. Gati has a strong vertical integration and have been gaining market share because unorganised players find it difficult to operate due to high wage cost and other procedural hurdles. Expectation of FDI in E-Commerce makes logistics sector very much attractive. FDI will allow big-ticket MNC's to set up JV's so as to tackle supply chain constraints and logistics. The news that the top brass in the government is keen to allow foreign direct investment in retail E-Commerce before the end of FY2014 and as Gati being a stronger player in the logistics sector will be the main beneficiary. GATI’s Core business continues to perform well in subdued market even though it suffered a loss due to its shipping division; however Gati’s management is confident enough that its core business is expected to grow by 20 % which contributes around 75 % to the total revenues and expects its shipping business to turn positive in FY2014 and expects FY14 would be a good year with expected revenue growth of 15 % and EBITDA growth of 30 %. In addition, Gati in association with IBM has initiated Business Transformation process in May 2013 wherein the management expects to save around Rs. 20 Cr of management and admin cost by FY14. Currently, Gati has 2 vessels out of which 1 were dry docked, Gati has divested 40 % in its Shipping business for Rs. 8 Cr to HNI group in Hyderabad, this has now seen an turnaround in the shipping business and making some profit. Consequently, Gati has signed MoU with International Shipping Logistics FZE (ISL) which is a subsidiary of Tata Steel and has launched a new coastal service line across Kandla-Mundra-Cochin Ports,and Gati managements expects this segment to turn profitable in coming quarter. GATI is independently focusing on the growing market demand for Cold Chain Solutions, e Commerce and International Freight forwarding. Gati has over 4,000 vehicles on road, fleet of refrigerated trucks, container vessels and world class mechantronic warehousing facilities across India. Gati was also the first to run the millenium parcel express train in October 2001 between Mumbai and Kolkata with 10 VPUs. The initiative to run a parcel express train between KYN (Mumbai) and NGC (Guwahati) was again taken by Gati - this is a classic example of PPP (Public Private Partnership). The Gati advantage of seamless connectivity across air, road, ocean and rail has resulted in large amount of offerings to the customers which is unmatched in the industry. Besides having a strong network in India, Gati has a strong market presence in the Asia Pacific region and SAARC countries. Gati's shipping division, Gati Coast to Coast based at Chennai, with two decades of experience in the industry has many firsts to its credit: first in operating direct service to Yangon; first in operating a direct container service from Ranong Port, Thailand; and the first in operating direct container service from Penang, Malaysia. Gati Coast to Coast has a tonnage of 43,581 DWT and a fleet strength of six vessels. At the current market price of Rs. 62.30, the stock is bit expensive but it trades at a PE of 17.30x FY14E. The company can post Earnings per share (EPS) of Rs. 3.60 in FY14E and One can buy GATI INDIA LTD with a target price of Rs. 74.00 for Medium to Long term investment and for the SHORT TERM PLAYERS it should be Rs. 65.00.

KEY FINANCIALSFY11FY12FY13FY14E
SALES ( Crs)1,203.001,189.001,273.401,462.30
NET PROFIT (₹ Cr)14.1041.509.6031.10
EPS ()1.604.801.103.60
PE (x)16.505.6020.506.40
P/BV (x)0.700.500.300.20
EV/EBITDA (x)6.808.706.506.10
ROE (%)4.8011.701.603.90
ROCE (%)7.5011.704.306.00

I would buy GATI INDIA LTD for Medium to Long term for target of Rs. 74 and for the shorter term the target would br Rs. 65.00. As I always say, I am a long term believer in markets & I do respect the markets and will keep a strict stop loss of ₹ 56.22 on every purchase(Why Strict stop loss of 8 % ?) - Click Here

READ HERE TO KNOW MORE ON LONG TERM INVESTING - CLICK HERE

VIEW THE POWER POINT PRESENTATION ON
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