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SBICap Securities
Allcargo Logistics (Buy)
CMP: ₹327.65
Target: ₹361
Allcargo Logistics has reported strong second quarter results on the back of robust performance across all segments namely MTO, CFS and P&E supported by: a) recovery in global trade; b) strong EXIM volumes; and c) inorganic growth.
On a consolidated basis, net sales came in at ₹1,460 crore, up 36.4 per cent y-o-y, led by robust volume growth from the multimodal transport operations (MTO) and CFS (container freight stations) segments.
Despite healthy growth, EBITDA margins are subdued at 8.1 per cent led by higher contribution (84 per cent of total revenues) by the MTO business. On the bottom-line front, the company reported adjusted PAT of ₹ 6.36 crore, up by 51 per cent y-o-y powered by: a) robust top-line growth; b) lower interest cost; and c) lower effective tax rate (16.6 per cent).
We expect the company to report 9.6 per cent and 9.2 per cent top-line growth for FY16 and FY17 respectively. We maintain BUY on Allcargo with revised target price of ₹361.
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