About the Company
Allcargo Logistics is engaged in providing integrated logistics solutions and offers specialised logistics services across multimodal transport operations, inland container depot, container freight station operations, contract logistics operations and project and engineering solutions.
Q4 2019 Updates
Financial Results & Highlights
Standalone Financials (In Lacs) |
||||||||
Q3FY19 |
Q3FY18 | YoY % | Q2FY19 | QoQ % | 9M FY19 | 9M FY18 |
9M% Change |
|
Sales |
*47133 | 27804 | 69.51% | 44278 | 6.44% | *126837 | 91814 | 38.15% |
PBT |
10982 |
879 | 1149% | 6759 | 62.48% | 19291 | 8122 |
137.51% |
PAT | 9410 | 949 | 891.57% | 5878 | 60.08% | 16979 | 8318 |
104.12% |
*Including other income of Rs 9680 Lacs/ ** including other income of Rs 14,951 Lacs
Consolidated Financials (In Lacs) |
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Q3FY19 |
Q3FY18 | YoY % | Q2FY19 | QoQ % | 9M FY19 | 9M FY18 |
9M% Change |
|
Sales |
181784 | 148483 | 22.43% | 174265 | 4.31% | 519058 | 453651 | 14.42% |
PBT |
8100 | 5213 | 55.38% | 8276 | -2.13% | 22666 | 18912 |
19.85% |
PAT |
5043 | 3221 | 56.56% | 6285 | -19.76% | 16759 | 16095 |
4.13% |
Detailed Results
-
- The company has got a dividend income of Rs 9680 Lacs from its foreign subsidiary which has improved the current quarter numbers. This has primarily lead to phenomenal growth in quarterly standalone revenues of almost 70% YoY. Similarly, the profit numbers for the quarter have seen a greater upswing compared to last year with almost 9 times and 11 times growth in PBT and Pat as compared to last year.
- The consolidated quarter revenues showed a healthy growth of 22% YoY.
- The consolidated PBT and PAT also rose more than 50% YoY.
- The consolidated PAT margin has improved significantly with a rise of 62 bps YoY for the current quarter but was down 82bps QoQ.
- This resulted in a 56% YoY growth in PAT with a decline of 20% QoQ.
- The consolidated numbers for 9M19 were modest with only 14% growth in revenues YoY.
- The consolidated PBT for 9M19 were up almost 20% YoY but the PAT was up only 4.1% YoY.
- The company revenues were divided into:
- MTO: 90% of Total Revenues
- CFS: 6% of Total Revenues
- Projects & Engineering: 4% of Total Revenues
- In its dominant Multimodal Transport Operations segment, the company has gained in global market share.
- The quarterly volumes and revenues growth for this segment have been up 16% and 22% YoY.
- The company also saw growing market share in their Container Freight Station segment with quarterly volumes and revenues up 15% and 25% YoY.
- This was mainly driven by strong growth in port volumes and growth in Kolkata and Chennai operations.
- The Projects & Engineering segment saw 12% growth in revenues YoY with a current executable order book of more than Rs 185 Cr.
Investor Conference Call Highlights
- The board announced a special interim dividend of Rs 1.5 and an interim dividend of Rs 3.5 to mark the 25 year of company operations.
- The company is optimistic about their growth prospects. The volumes for the LCL and FCL segments in MTO side have grown 15% despite headwinds caused by slowing global economy and trade restrictions.
- The company maintains that average freight rates have remained stable globally despite existing capacity exceeding demand in this industry.
- The company has acquired 93 acres of land in Jhajjar in Harayana for the development of the warehousing segment there. This segment is expected to be operational from the second half of 2019.
- The management is committed to building technology enabled business models to synergize better with their existing brand image. They are also looking into various digitization initiatives like blockchain, artificial intelligence and robotic process automation for the same.
- The company is optimistic in their growth prospects in the global MTO and CFS segments.
- The company is looking forward to growth in their contract logistics business which they operate under the JV called Avvashya CCI.
- They are also engaging in the development of their new business line of MMLP which should take 2 to 3 years to be completely operational.
- The company is expecting around 60% asset utilization rate in the coming quarter as compared to 55% in the current quarter.
- The company is seeing the market for MTO to be growing at 3%-5% per year. With continuation of their current volume growth, they can reasonably expect to be gaining market share if the volume growth sustains in the future.
- The management is expecting ROCEs for each segment to rise in the near future as they still have spare capacity to deal with higher volumes than those at present.
- The company is developing a multimodal logistics park in Jhajjar which should add 2.4 million square feet for warehouse space.
- For all of its expansion commitments, the company is expecting a capex figure from Rs 400 Cr to Rs 700 Cr. This capex would be taking place in FY19 and FY20 as well.
- The management has acknowledged that the past two years were bad for the P&E business but now this segment is picking up.
Analyst’s View
Allcargo Logistics have been a global presence in the shipping for a long time now. They have just completed 25 years of operations and are still bullish about their growth prospects in the future. The company has exhibited healthy growth in domestic and international businesses and have been expanding into newer businesses as seen from their participation in the joint venture Aavashya CCI. The domestic prospects for the company look promising with warehousing partnerships with online retailers like Flipkart.
The international shipping industry on the other hand seems to have slowed down considerably with demand expected to stay stagnant and industry capacity exceeding demand. Thus the shipping business can only grow by devouring existing market shares of competitors which will prove much more difficult as compared to organic growth brought by segment expansion. Thus the future growth of the company depends on what direction the management pursues.
Disclaimer
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