BUY CMP 85.15 Target Price 98.00 PATEL INTEGRATED LOGISTICS LTD Result Update (PARENT BASIS): Q4 FY15 JULY 1 st 2015 ISIN: INE529D01014 Index Details Stock Data Sector Surface Transportation BSE Code 526381 Face Value 10.00 52wk. High / Low (Rs.) 157.70/25.00 Volume (2wk. Avg.) 40000 Market Cap (Rs. in mn.) 1293.14 Annual Estimated Results (A*: Actual / E*: Estimated) YEARS FY15A FY16E FY17E Net Sales 5879.81 6320.80 6858.06 EBITDA 216.16 247.35 268.27 Net Profit 59.90 75.90 87.97 EPS 3.94 5.00 5.79 P/E 21.59 17.04 14.70 Shareholding Pattern (%) 1 Year Comparative Graph PATEL INTEGRATED LOGISTICS LTD S&P BSE SENSEX SYNOPSIS Patel Integrated Logistics Ltd provides logistics services in India. Today it handles around 5 Iakh tonne cargo worth Rs. 12,000 crore annually and boasts of a distinctive edge over its competition. During the quarter, net profit jumps to Rs. 23.35 mn against Rs. 12.00 mn in the corresponding quarter ending of previous year, an increase of 94.60%. Revenue for the quarter stood at Rs. 1338.24 mn from Rs. 1351.89 mn, when compared with the prior year period. During Q4 FY15, EBIDTA is Rs. 59.87 mn as against Rs. 45.97 mn in the corresponding period of the previous year, grew by 30.25%. During Q4 FY15, PBT increased by 73.69% to Rs. 25.76 mn from Rs. 14.83 mn in the corresponding period of the previous year. EPS of the company stood at Rs. 1.54 a share during the quarter, registering 94.61% increased over previous year period. Patel Integrated Logistics Ltd has recommended the dividend @ Re. 0.50 per equity share i.e. 5% on equity share capital of the Company for the year ended March 31, 2015. For the year 2014-15, the company reported revenue of Rs. 5879.81 mn compared to Rs. 5431.48 mn a year ago, grew by 8%. For FY15, Net profit was Rs. 59.90 mn compared to Rs. 23.49 mn a year ago, grew by 155%. Net Sales and PAT of the company are expected to grow at a CAGR of 8% and 38% over 2014 to 2017E respectively. PEER GROUPS CMP MARKET CAP EPS P/E (X) P/BV(X) DIVIDEND Company Name (Rs.) Rs. in mn. (Rs.) Ratio Ratio (%) Patel Integrated Logistics Ltd 85.15 1293.14 3.94 21.59 1.43 5.00 Allcargo Logistics Ltd 316.85 39938.20 7.73 40.99 3.04 100.00 Aegis Logistics Ltd 799.40 26700.00 32.28 24.76 6.21 75.00 Transport Corporation of India Ltd 253.60 19190.80 10.04 25.26 3.70 75.00
QUARTERLY HIGHLIGHTS (PARENT BASIS) Results updates- Q4 FY15, Months Mar-15 Mar-14 % Change Net Sales 1338.24 1351.89 (1.01) PAT 23.35 12.00 94.60 EPS 1.54 0.79 94.61 EBITDA 59.87 45.97 30.25 The company s net profit jumps to Rs. 23.35 million against Rs. 12.00 million in the corresponding quarter ending of previous year, an increase of 94.60%. Revenue for the quarter fell by 1.01% to Rs. 1338.24 million from Rs. 1351.89 million, when compared with the prior year period. Reported earnings per share of the company stood at Rs. 1.54 a share during the quarter, registering 94.61% increased over previous year period. Profit before interest, depreciation and tax is Rs. 59.87 million as against Rs. 45.97 million in the corresponding period of the previous year. Break up of Expenditure Break up of Expenditure Rs. in (millions) Q4 FY15 Q4 FY14 % CHNG Operating cost 1166.13 1190.34-2% Employees cost 68.09 56.61 20% Depreciation 11.43 10.03 14% Administrative & Other Expenses 55.34 56.94-3%
Segment Revenue Latest Updates Patel Integrated Logistics Ltd has recommended the dividend @ Re. 0.50 per equity share i.e. 5% on equity share capital of the Company for the year ended March 31, 2015. COMPANY PROFILE Patel Integrated Logistics Limited provides logistics services in India. The company offers surface transport, including movement of industrial raw materials; and finished products, such as chemicals, machinery, plastic, steel and consumer products, etc through two business models, full truck loads and part loads. It also provides door pick up and door delivery express cargo; air cargo consolidation; wholesale courier consolidation; airfreight; international freight forwarding and courier consolidation; and warehousing services. Its customers include multinationals, public and private sector organizations, small-scale industries, and the trading community. The company was founded in 1959 and is headquartered in Mumbai, India. The company that began with just one truck in 1959 has grown to become the largest homegrown player with hundreds of trucks and 800 offices spread across the country. Today it handles around 5 Iakh tonne cargo worth Rs. 12,000 crore annually and boasts of a distinctive edge over its competition. Today Patel Integrated is the only homegrown logistics player that can cater to clients from the first leg to last mile delivery (air cargo. transport fleet and delivery offices). Patel Logistics commands 70-80% share in air cargo market in the country, making it the mostpreferred choice for the e-tailers.
FINANCIAL HIGHLIGHT (PARENT BASIS) (A*- Actual, E* -Estimations & Rs. In Millions) Balance Sheet as at March 31 st, 2014-2017E FY14A FY15A FY16E FY17E SOURCES OF FUNDS Shareholder's Funds Share Capital 151.87 151.87 151.87 151.87 Reserves and Surplus 747.26 753.44 829.34 917.31 1. Sub Total - Net worth 899.13 905.31 981.21 1069.18 Non Current Liabilities Long-term borrowings 103.40 103.71 107.86 111.09 Deferred Tax Liabilities [Net] 46.23 26.22 19.40 16.30 Other Long Term Liabilities 73.61 56.81 61.35 65.04 2. Sub Total - Non Current Liabilities 223.24 186.74 188.62 192.43 Current Liabilities Short Term Borrowings 295.41 319.24 338.39 351.93 Trade Payables 225.14 204.64 225.10 240.86 Other Current Liabilities 171.34 140.40 150.23 156.24 Short Term Provisions 103.62 110.04 114.44 120.16 3. Sub Total - Current Liabilities 795.51 774.32 828.17 869.19 Total Liabilities (1+2+3) 1917.88 1866.37 1997.99 2130.80 APPLICATION OF FUNDS Non-Current Assets a) Fixed Assets 485.77 426.65 457.63 485.63 b) Non-current investments 17.20 17.20 18.23 19.14 c) Long Term loans and advances 78.24 62.38 71.74 77.48 1. Sub Total - Non Current Assets 581.21 506.23 547.60 582.25 Current Assets Trade receivables 864.98 894.86 939.60 995.98 Cash and Bank Balances 166.15 159.77 183.74 205.78 Short-terms loans & advances 300.04 300.40 321.43 340.71 Other current assets 5.50 5.11 5.62 6.07 2. Sub Total - Current Assets 1336.67 1360.14 1450.39 1548.55 Total Assets (1+2) 1917.88 1866.37 1997.99 2130.80
Annual Profit & Loss Statement for the period of 2014 to 2017E Value(Rs.in.mn) FY14A FY15A FY16E FY17E Description 12m 12m 12m 12m Net Sales 5431.48 5879.81 6320.80 6858.06 Other Income 8.67 16.78 19.80 21.38 Total Income 5440.15 5896.59 6340.60 6879.45 Expenditure -5272.84-5680.43-6093.25-6611.17 Operating Profit 167.31 216.16 247.35 268.27 Interest -91.52-91.10-95.66-99.48 Gross profit 75.79 125.06 151.69 168.79 Depreciation -44.90-45.13-48.29-51.19 Profit Before Tax 30.89 79.93 103.40 117.61 Tax -7.40-20.03-27.51-29.64 Net Profit 23.49 59.90 75.90 87.97 Equity capital 151.87 151.87 151.87 151.87 Reserves 747.26 753.44 829.34 917.31 Face value 10.00 10.00 10.00 10.00 EPS 1.55 3.94 5.00 5.79 Quarterly Profit & Loss Statement for the period of 30 th Sep, 2014 to 30 th June, 2015E Value(Rs.in.mn) 30-Sep-14 31-Dec-14 31-Mar-15 30-Jun-15E Description 3m 3m 3m 3m Net sales 1611.67 1446.12 1338.24 1445.30 Other income 2.26 1.63 11.20 8.51 Total Income 1613.93 1447.75 1349.44 1453.81 Expenditure -1560.07-1388.25-1289.56-1393.27 Operating profit 53.86 59.50 59.87 60.54 Interest -24.78-21.96-22.69-23.82 Gross profit 29.08 37.54 37.18 36.71 Depreciation -11.69-11.33-11.43-12.11 Profit Before Tax 17.39 26.21 25.76 24.60 Tax -7.09-7.79-2.41-6.49 Net Profit 10.30 18.42 23.35 18.11 Equity capital 151.87 151.87 151.87 151.87 Face value 10.00 10.00 10.00 10.00 EPS 0.68 1.21 1.54 1.19
Ratio Analysis Particulars FY14A FY15A FY16E FY17E EPS (Rs.) 1.55 3.94 5.00 5.79 EBITDA Margin (%) 3.08% 3.68% 3.91% 3.91% PBT Margin (%) 0.57% 1.36% 1.64% 1.71% PAT Margin (%) 0.43% 1.02% 1.20% 1.28% P/E Ratio (x) 55.06 21.59 17.04 14.70 ROE (%) 2.61% 6.62% 7.74% 8.23% ROCE (%) 16.35% 19.67% 20.71% 20.85% Debt Equity Ratio 0.44 0.47 0.45 0.43 EV/EBITDA (x) 9.12 7.20 6.29 5.78 Book Value (Rs.) 59.20 59.61 64.61 70.40 P/BV 1.44 1.43 1.32 1.21 Charts
OUTLOOK AND CONCLUSION At the current market price of Rs.85.15, the stock P/E ratio is at 17.04 x FY16E and 14.70 x FY17E respectively. Earning per share (EPS) of the company for the earnings for FY16E and FY17E is seen at Rs.5.00 and Rs.5.79 respectively. Net Sales and PAT of the company are expected to grow at a CAGR of 8% and 38% over 2014 to 2017E respectively. On the basis of EV/EBITDA, the stock trades at 6.29 x for FY16E and 5.78 x for FY17E. Price to Book Value of the stock is expected to be at 1.32 x and 1.21 x for FY16E and FY17E respectively. We recommend BUY in this particular scrip with a target price of Rs.98.00 for Medium to Long term investment. INDUSTRY OVERVIEW Roadways Commercial vehicle sales are considered the barometer of economic growth and this industry has been facing a steady decline year over year for the past 5 years after the global financial crisis. The transport sector faced the direct impact of the economic slowdown and has been going through trying times. At one end is falling freight and at the other end are rising fuel, increasing toll costs and other operating costs. The industry is still highly fragmented and largely unorganized with a large number of operators. The Industry continues to remain highly competitive due to the presence of large number of small players in the industry. The sector continues to suffer from state level levies, non implementation of GST, poor road conditions, low price realisations and increasing labour costs. Opportunities & Threats: Expansion of the road network with better quality construction, opportunity to use higher capacity, more fuel efficient vehicles which help to reduce cost, increasing domestic consumption, rising economic wealth in Tier 2 cities, a new government at centre committed to reviving the economic growth, lifting of ban on mining offer opportunity for rapid future growth. Rising freight rates on the Railway network and competitive run time by surface due to improved highway network and ability to deliver in remote locations are going to be a big opportunity for the surface transport sector to share the freight moved by Railways in the coming times. With liberalization, large Multinational Companies are looking towards India to be manufacturing hub for Asia and Africa, the potential for future growth is exponential.
The government is also keen to reform the transport sector which includes increasing public funding for transportation in its Five Year Plans, launching National Highway Development Program, Accelerated Road Development Program for the remote areas like North East region etc. The government is also financing the development and maintenance of roads by creating a Central Road Fund (CRF). Retail Retail business has been born out of the current need of the market, where organizations wanted to reduce their costs on warehousing, manpower, inventory, wastages due to storage, damages or expiry. Large segment of corporates are willing to pay a premium for assured deliveries in guaranteed transit time. This leads to a boom in Express Cargo business which is now growing at a good pace. The Express Cargo industry primarily caters to the transportation of consumer goods which are high value and compact in nature. With the boom in consumer market and increase in living standard of middle class people of the country, Express Cargo industry is set to grow at a scorching pace in coming years. Air Freight sector The Air Freight sector in India has been grown at a Compounded Annual Growth rate of 11.36% from the year 2006 to 2011, and maintained a further growth rate of 10% in the year 2014. During the last five years, the cargo handled at Indian airports witnessed Compounded Annual Growth Rate (CAGR) of 10.9%. These statistics reflects the hope and opportunities for the industry in the years to come. The industry needs to take up the challenge to be innovative and delivering new solutions in a creative manner. At the same time, it s also important that shippers are part of the innovation. With the government focusing on expanding domestic air connectivity, the Civil Aviation Ministry has identified 24 airports for developing domestic cargo terminals to create a national logistic network for faster movement of goods and this is certainly leads to increase in efficiency of the Industry. Outlook: The outlook for the transportation market in India continues to remain very positive offering significant opportunities to all concerned stakeholders. While the quality of road infrastructure is certainly likely to improve, the pace of infrastructure development is critical to minimize losses, both economic and environmental. The express sector in India has a bright opportunity. As a fast-growing, market-driven economy, we believe India is poised to take a leading role on the world s stage. The outlook for this product is progressive. Though it is a part of the Transport Sector in general, the Express Cargo Industry, in a short span of time, has been able to carve a separate status and identity for itself. With the steady growth in all the sectors including the Manufacturing and the Retail Trade, the Express cargo industry is poised for healthy growth.
The outlook of Air Cargo industry looks very bright. Especially with the growth of the Tele-Shopping, E Commerce segment and demand for Mobile industry, the air cargo industry is poised to take the advantage of such tremendous growth. Disclaimer: This document is prepared by our research analysts and it does not constitute an offer or solicitation for the purchase or sale of any financial instrument or as an official confirmation of any transaction. The information contained herein is from publicly available data or other sources believed to be reliable but we do not represent that it is accurate or complete and it should not be relied on as such. Firstcall Research or any of its affiliates shall not be in any way responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report. Firstcall Research and/ or its affiliates and/or employees will not be liable for the recipients investment decision based on this document.
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