Allcargo Logistics - BUY - TP Rs.205 - Result Update - Kotak

- ALL has reported strong volume growth in the key segment of Multimodal Transport Operations (MTO) at 1.43 lakh TEUs (+3% QoQ and +12% YoY), however the Container Freight Station (CFS) segment disappointed at 65,362 TEUs (-5.6% QoQ and -17% YoY) with weak Exim trade, competition and negative impact of Direct Port Delivery (DPD) mechanism. Even project division disappointed with weak private capex cycle. Revenue was reported at Rs 15.47 bn (+9.7% YoY and +4.3% QoQ) with falling EBIDTA margin at 6.8% (-10 bps QoQ and -220 bps YoY). Consequently, PAT was reported at Rs 652 mn (+2.7% QoQ and +1.6% YoY) vs. our expectation of Rs 657 mn. Strong MTO operations is healthy for the company, but declining performance of the high margin CFS segment is a cause of concern. Estimate earnings to grow at 19% CAGR over FY17 to FY19E, with ROE of 11.7% and ROCE of 14.1% for FY19. We also estimate ALL to be one of the biggest beneficiary of improvement in trade and GST implementation. Maintain estimates and continue to recommend "BUY" with an unchanged TP of Rs 205

Shares of ALLCARGO LOGISTICS LTD. was last trading in BSE at Rs.167.05 as compared to the previous close of Rs. 168.2. The total number of shares traded during the day was 30773 in over 486 trades.

The stock hit an intraday high of Rs. 168.15 and intraday low of 165.2. The net turnover during the day was Rs. 5134898.

Source : Equity Bulls

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