IBR India Logistiscs Newsletter Aug'13

Monthly Logistics Update AUG’13

M O N T H L Y R E V I E W O F I N D I A ’ S L O G I S T I C S S E C T O R

www.indiabusinessreports.com

HIGHLIGHT OF THE MONTH

Apr-Jun quarter results dismal for listed logistic stocks in India

Sales down 7% for IBR universe of listed logistics companies in Q1

Indian logistics companies have been suffering from the manufacturing slowdown since the last several quarters. The Apr-Jun’13 quarter was no better.

Aggregate sales of the 18 listed companies that IBR tracks, fell 7% for Apr-Jun’13 over the previous year. EBITDA margin contracted by over 40 basis points. With finance costs rising for most companies, net profit was down 33%.

Share market performance of these companies reflects their poor fundamentals. No company in our set hit a new 52 week high, while 5 of them hit new 52 week lows.

This quarter has been difficult for almost all companies. While DHL, the air courier leader, was still been able to grow topline, EBITDA has fallen, and net profit is flat. Container transport leader ConCor and second company Gateway have exactly the same trend to show.

There is hardly any company which has shown improved performance across the three key parameters: Sales, EBITDA margins and net profit.

Among the few companies to show good performance is Kesar Terminals, which has shown 27% increase in sales, with just a minor drop in EBITDA margins and has shown a 26% growth in net profit.

Sical overtook Essar Shipping and Mercator in market cap

In terms of market cap movement, some of the over-leveraged companies like Mercator and Essar Shipping continue to slide. Sical Logistics has overtaken both these companies. Mercator and Essar Shipping have seen their share values drop sharply over the last 2-3 years, however, since debt has been ballooning, the companies are still not cheap; EV/EBITDA continues to remain high.

Gati wants to induct a strategic investor in Kauser

In deal news/activity in August:

Gateway wants to list its cold chain subsidiary Snowman

Gati is looking to induct a strategic investor in Kausar, its own cold chain subsidiary

Great Eastern Shipping has announced a buyback of 10 million shares amounting to around 6.6% of outstanding capital

Caparo group formed a 60:40 JV for putting up warehousing capacity

Supply chain focussed IT company Four Soft has sold its IT business

IBR MONTLHY LOGISTICS UPDATE Aug’13

www.indiabusinessreports.com 2

DOMESTIC NEWS UPDATE

Caparo Group and Procam to develop warehousing

Caparo will hold 60% in the JV Caparo Group has entered into a joint venture agreement with a supply chain management company Procam Logistics of India. The Caparo Group will hold about 60 % of the total JV equity and Procam Logistics, the balance 40 %.

Christened as Caparo Procam Infrastructure, the JV firm will add one million sq feet of additional storage space and other value added services. The JV aims to create warehousing infrastructure as well as offer management & allied services to various industry sectors like auto, retail, rail and heavy engineering, the company's mediastatement stated.

Elaborating further, Caparo India chairman Angad Paul said, Caparo's existing land bank in and around the auto and manufacturing hubs of Chennai, Bawal, Rudrapur, Jamshedpur, Sanand, Dewas, Pune will be available to the JV for development of state-of-the-art warehousing and infrastructure facilities. These facilities would be offered both as an exclusive and multi user facilities for design, development and management of sustainable supply chain solutions across the industry spectrum.

Four Soft sells software business in slump sale

Supply chain focussed IT company Four Soft has sold its IT business

Four Soft Limited, logistics IT solution provider, is exiting its software business by selling its business to Transport IT Solutions Private Limited, a part of the UK based Kewill Group, on a slump sale basis for a cash consideration of $22.5Mn, reports Deal Curry. Four Soft plans to exit the business and focus on newer and emerging areas: application development and maintenance, big data and analytics, enterprise applications for media and entertainment industry and the like.

The acquisition of Four Soft is part of Kewill's strategic plan to significantly grow the business over the next 5 years. This acquisition would allow Kewill to enhance its product and technology offerings along with domain skills, which will significantly boost Kewills position.

Four Soft is also selling its investment in its subsidiaries which include Four Soft Singapore Pte Ltd, Four Soft BV and Four Soft USA Inc for another $20.9 Mn.

Great Eastern announces buyback

GESCO to reduce capital by 6.6% Great Eastern Shipping (GESCO) said it will buy back shares worth Rs 279 crore from public investors.

The company will buy back equity shares from the open market at a maximum price of Rs 279 apiece, Great Eastern Shipping said in a regulatory filing to the stock exchanges.The Board of Directors of the company last week approved the share repurchase programme.

According to new Sebi norms, the companies will have to complete their buy back offers within six months, from 12 months earlier.



Those not able to meet the target will be barred from launching another offer for a period of one year.

Also the company will have to keep 25 per cent of the proposed buy back offer amount in an escrow account, a move that will check the company from making non-serious offers that could wrongly influence the share price.

Dubai based Mohebi Logistics enters India

Dubai based Mohebi Logistics, a leading third party supply chain management company, has entered Indian market with a 100% subsidiary in Pune.

Mohebi Logistics, which is part of the $1 billion Zainal Mohebi Group, will initially provide supply chain support to the Indian unit of Compass Group Plc, the world's largest contract food services company. Mohebi works with customers like Nestle, Compass, Starwood and McDonald's in the Arabian Gulf.

The group's diversified interests include retailing, food distribution, shipping and energy. "We will start Indian operations working with Compass and look to expand our customers going forward. India is a focus market for our logistics business, which is beginning to expand outside Middle East," Mohammed Mohebi, CEO, Mohebi Group, told TOI.

Star Agri plans to set up 50 private mandis

Star Agri targeting a turnover of Rs 120 crore in FY14, as against Rs 73 crore in FY13

For 2012-13, StarAgri had a turnover of around Rs 73 crore, and a net profit of Rs 24 crore, says an article in Forbes India. It expects to close 2013-14 at around Rs 120 crore.

While a bulk of its revenues—about 65 percent—inevitably comes from warehousing, StarAgri also provides post-harvest management services like procurement, collateral management, lab testing and logistics for various commodities. For the sake of efficiency, these five aspects of their business have been divided into different arms of the company.

Star now operates in 183 locations across seven states and has seven lakh tonnes of storage. It holds commodities worth Rs 1,500 crore in 110 collateral management locations. It has also tied up with 26 banks that provide credit to farmers, with commodities in the warehouse acting as collateral. StarAgri currently has a direct relationship with more than 50,000 farmers; its vision is to reach 25 lakh.

It intends to create 50 private mandis licensed by the Agricultural Produce Marketing Committee. These will provide infrastructure to farmers in terms of logistics, warehousing and lab testing, which are tough to find at regular mandis. StarAgri wants to expand its warehouses, which have a capacity of 10 lakh tonnes, by creating silos that will have additional capacity of 250,000 tonnes.

Supply Chain issues hampering Sahara’s Q

Franchisees complain about unsteady supplies

The year-old Q Shop, Sahara Group’s consumer packaged goods and retail business, continues to falter with poor logistics and distribution, says the business paper Mint.



The company, which won an entry into the Guinness Book of World Records by opening 315 stores in a single day in 10 states across India at 4pm on 1 April, 2013, operates 920 stores in 402 cities. By October, it plans to have 2,000 franchisees. In an April press release, the company had announced plans to open 10,000 franchise stores by end of fiscal 2014.

The Mint article says scale appears to have created many problems for Q Shop with most franchisees dissatisfied with delays in the supply of goods.

Snowman, Gateway’s cold chain subsidiary, to do an IPO

Gateway Distriparks is planning to list its cold chain logistics solutions arm - Snowman Logistics Limited, reported business paper Mint.

Snowman is India's first cold supply chain company with a nationwide network connecting more than 100 cities and more than 4,400 outlets. Snowman has a pan-India presence with warehousing, transportation and distribution services.

Its extensive infrastructure includes warehouses and more than 100 owned and leased reefer vehicles and transport assets.

The company recorded a profit of Rs 30.01 Cr on a sales of Rs 245.34 Cr for the first quarter of Fiscal 14.

Gati looking to offload stake in cold chain subsidiary

Kauser had a revenue of Rs 46 crore in FY13

Logistics firm Gati Ltd is in talks with two global firms for a partial stake sale in its cold chain subsidiary Gati Kausar, reported Hindu Businessline. However, Gati wants to continue holding majority stake in Kausar as it expects to see a 25 per cent growth this year in the segment.

The investor will be strategic (a company with expertise in cold chain logistics) as the aim is to get additional equity as well as the benefit of global practices. Gati Kausar plans to set up two warehouses, one each near Delhi and Mumbai.

For the year ended June 30 2012-13 (company’s financial year runs from July to June), Gati Kausar registered 14 per cent growth, with revenues of Rs 46 crore.

Gati Ltd is a listed firm, with investments from Japanese firm KWE and GE Financials in different subsidiaries.

Gati Kausar, with a fleet of 213 refrigerated vehicles, is the second largest cold chain player after Snowman Logistics, claims Jain.

PSU port modernisation to add 220 mn ton capacity

Government keen on driving increase in port capacity

Government said the 43 port modernisation and expansion projects under implementation at an estimated cost of Rs 12,000 crore are expected to add about 220 million tonnes capacity.

Minister of State for Shipping Milind Deora said in Rajya Sabha that the capacity of all major ports, as on March 31, 2013, was 744.91 million tonne per annum



"There are 43 modernisation and expansion projects awarded and under implementation at an estimated cost of about Rs 12,000 crore which are expected to add about 220 million tonnes capacity on their completion," he said.

The Minister noted that traffic at major ports declined last year due to ban on iron-ore mining and global slowdown.

He said this year onwards all major ports are required to prepare RFD document (results framework document) giving a summary of key results they want to achieve during the financial year on various performance indicators.

The document provides objectives and the basis to evaluate port performance at the end of the year.

The targets set for cargo handling by 13 major ports, including Kandla, JNPT and Haldia Dock Complex, for the current fiscal is 609 million tonnes.

DHL to grow SME business

DHL services around 60,000 customers in India currently

Logistics major DHL is to focus more on small and medium enterprises to grow its business in India, reported Hindu Businessline. According to R. S. Subramanian, Country Manager, DHL Express India Pvt Ltd, the SME sector accounts for more than half of the company’s India business.

Besides, the logistics firm recently started handling high-value gem and jewellery consignments. “As there is great potential, and we have set up enough infrastructure to handle such high-value cargoes, and for safe transit, we started handling these consignments.”

DHL Express today, with its pan-India presence, services over 60,000 customers. And over 30 per cent of them are from South India. “We have witnessed continuous double-digit growth in business across the industries we service in this part of the country,” said Chandrashekahar Pitre, Senior Director (Marketing), South Asia, DHL Express.

GLOBAL NEWS UPDATE

Carlyle to invest $400mn in China warehouse business

Carlyle aiming to put up 17 warehouses in China

U.S. private-equity firm The Carlyle Group (CG) is tying up with a real-estate investment manager and a large Chinese logistics warehouses developer to invest $400 million in 17 warehouses in Chinese cities, underscoring investor interest in the country's logistics sector amid strong domestic consumption.

Carlyle, along with property manager The Townsend Group, will invest $200 million, according to a statement from the U.S. firm Thursday. Shanghai Yupei Group will invest the same amount.

The deal adds to a handful of recent domestic and foreign private-equity investments into Chinese logistics.

Cathay Capital Private Equity said in August that it is investing 120 million



yuan ($19.6 million) in Shanghai Zhengming Modern Logistics Co., a company that transports food and products that need refrigeration. Homegrown private-equity firm Citic Capital Holdings said this month it is buying a minority stake in domestic courier S.F. Express (Group) Co. And last May, Baird Private Equity invested in Chinese refrigerated-trucks maker Henan Bingxiong Refrigerated Truck Co.

"Modern logistics is a nascent but fast growing industry in China, supported by strong growth in domestic consumption, exponential expansion of e-commerce and favorable government policies," said Carlyle Asia Real Estate Managing Director and Head Jason Lee in the statement.

Carlyle's investment will go toward five warehouses already owned by Shanghai Yupei as well as twelve new warehouses to be built over the next two years. The warehouses will be in Shanghai, Beijing and Guangdong, as well as second-tier cities, including Shenyang, Tianjin, Chongqing, Zhengzhou and Hefei.

Its investment will come from the Carlyle Asia Real Estate fund, which has made 15 investments so far, including its May acquisition of stakes in two Chinese shopping malls owned by SZITIC Commercial Property Co. The fund has committed a total of $2.2 billion in Asia.

Shanghai Yupei Group, founded over a decade ago, is one of the largest warehouse developers and operators in China.

Deutsche Post’s Asia strategy pays off

Deutsche Post's international arm DHL has a dominant market position in the Asia-Pacific region

Deutsche Post's strategy of investing in Asia paid off in the second quarter as it gained market share in its express delivery business, offsetting losses from cost-conscious customers switching to cheaper shipping options.

The world's largest postal and logistics company by revenue reported a 14 percent rise in operating profit that was in line with expectations and raised its guidance for the whole of 2013 by 50 million euros to 2.75-3.0 billion euros.

Deutsche Post's international arm DHL - comprising express, freight forwarding and supply chain - has a dominant market position in the Asia-Pacific region, and while macroeconomic trends in China are weakening, intra-Asian trade flows are still healthy, benefiting the express market there.

UPS, whose package delivery business is bigger than Deutsche Post's, has been hurt by a weaker than expected outlook for the second-half in the United States, where the German company has little exposure.

Deutsche Post also still owns Germany's post office network and has about 80 percent of the domestic mail market in Europe's biggest economy. Profits from that business, which includes booming deliveries for online retailers, rose to 223 million euros from 38 million euros a year earlier, largely due to the absence of a one-off payment for value-added tax.

DHL, already the leader in Asia with around a third of the market, opened a 143 million euro hub in Shanghai last year to move goods flowing to Northern Asia quickly.

China alone makes up half of the DHL group's revenues and the new hub was



part of a plan to raise the Asia-Pacific region's share of DHL group sales to 30 percent by 2017 from just under 20 percent in 2012. (Source: Reuters)

Hi Logistics, LG’s subsidiary, enters UK market

Hi takes a build-to-suit lease from Prologis

Hi Logistics, a specialist logistics subsidiary of LG Electronics has secured its first UK distribution hub, with a pre-let at Prologis Park Ryton in the West Midlands.

As well as being the company’s first in the UK, the 165,200 sq ft facility is also the first building to be let under the terms of the build-to-suit five-year lease initiative that Prologis launched in 2012. Since the building already has detailed planning permission, construction work can start on site at the beginning of September.

Hi Logistics is expanding its international logistics business alongside LG Electronics - a global leader in consumer electronics, mobile communications and home appliances. Hi Logistics, an established Prologis customer, already occupies facilities in The Netherlands, Poland and the United States, while LG Electronics is a Prologis customer in Mexico.

UPS expands in China

UPS is present in 87 cities in China United Parcel Service Inc. opened two new contract logistics distribution facilities in Chengdu and Shanghai to continue developing its national distribution network in China.

Atlanta-based UPS (NYSE: UPS) now has more than 130 distribution facilities, covering 87 cities. Last year, the logistics and shipping giant opened UPS healthcare facilities in Shanghai and Hangzhou.

The two new contract logistics facilities will provide distribution and warehousing to shippers who want to reach customers within China.

The UPS Store Launches 3D printing services

The UPS Store has 4300 locations in the USA

The UPS Store announced that it would be the first nationwide retailer to test 3D printing services in-store. According to the press release, “Select UPS Store locations will be offering the services to start-ups, small businesses and retail customers, beginning in the San Diego area with locations in additional cities across the United States in the near future.”

The UPS Store has 4,300 franchised locations in the USA, mostly located in retail centers. According to a study conducted by The UPS Store, small business owners showed “high interest” in using 3D printing services to create prototypes, artistic renderings, and promotional materials. To meet that need The UPS Store will offer in-house 3D design services and 3D printing in-store.

APM-Maersk Group Q2 profit beats estimates

Improving developed economies imply improved earnings prospects for global logistics majors

Danish logistics and port operations giant, AP Moller-Maersk Group, has posted a $856 million profit in the second quarter of the year. The Danish company's second-quarter group net profit fell 11 percent to $856 million, against a forecast for a 30 percent drop to $667 million. The group said its



good operational result in the second quarter was helped by lower costs in its shipping unit.

Significant improvements were seen in Maersk Line and Maersk Drilling, whereas Maersk Oil's profit was reduced due to declining entitlement production and lower oil price while maintaining substantial exploration costs in order to expand the oil production portfolio.

Maersk Line made a profit of $439 million and a return on invested capital (ROIC) of 8.5 per cent, pointing out that the significant improvement in the financial performance was achieved through lower costs.

Within the period under review, the conglomerate also revealed that APM Terminals made a profit of $179 million. ROIC was 12.8 per cent.

It said the volumes were at the same level as last year, with most terminals in Europe and North America recording decreased volumes, offset by continued positive developments in high growth markets. Cash flow from operating activities was $241 million and cash flow used for capital expenditure was $212 million ($63 million).

The shipping and oil company said that the outlook for container transportation remains challenging, with demand expected to remain weak.

Like other shipping lines, Maersk has been hit by weak freight demand at the same time as the industry continues to struggle with overcapacity on the busiest shipping routes. Deliveries of new container ships are expected to amount to 9.5 per cent of its fleet and Maersk expects demand growth to remain modest this year.



STOCK MARKET PERFORMANCE OF LISTED LOGISTICS COMPANIES

Company Name Market Cap (Rs

mn)

Price (Rs)

1w 1m 3m 6m 12m

Container Corporation Of India 1,35,901 1,045.6 (0.8) 6.5 (7.5) 0.4 11.5

Blue Dart Express 52,183 2,199.1 (1.1) (6.7) (19.6) (4.9) 11.1

Great Eastern Shipping Co 38,347 251.8 0.9 14.7 2.5 8.2 (0.3)

Redington India 23,604 59.2 4.3 4.9 (21.5) (30.5) (21.6)

Shipping Corporation of India 14,253 30.6 0.7 4.3 (16.7) (34.8) (40.4)

Gateway Distriparks 11,662 107.6 (2.3) 5.9 (10.5) (16.8) (21.1)

Allcargo Logistics 9,849 77.3 5.9 14.7 (30.5) (39.7) (40.3)

Aegis Logistics 3,686 110.4 (0.4) 1.3 (23.8) (13.5) (7.5)

Transport Corporation of India 3,276 45.0 (2.2) (8.8) (20.9) (22.2) (26.7)

Sical Logistics 3,225 58.0 0.9 (0.7) (2.5) (11.4) (14.4)

Essar Shipping 2,798 13.7 (4.6) (17.3) (28.9) (35.9) (48.5)

Mercator 2,530 10.3 0.2 6.2 (19.9) (35.4) (45.9)

Gati 2,139 24.7 3.8 7.6 (4.5) (13.5) (32.4)

Chart.Logistics 1,044 10.6 (6.1) 27.4 (24.6) (37.8) -

Arshiya International 682 11.0 (11.1) (4.6) (45.2) (65.4) (90.6)

ABC India 623 115.0 (10.2) (11.4) (17.3) 5.4 -

Shreyas Shipping 460 21.0 (8.9) (8.7) (29.6) (20.2) (43.0)

Kesar Terminals 294 56.0 (1.2) (2.7) (3.5) (8.9) (16.4)

BSE Sensex 18,620 0.5 (3.6) (5.8) (1.6) 6.8

BSE 500 6,674 (0.2) (3.9) (10.3) (7.2) 0.6

Percentage Change

(Prices as on 30 Aug’13)

Sector scrips continued to remain under pressure in August. Great Eastern rose due to its proposed share buyback Company Name 52 week High 52WH Date Diff from

52WH

52 Week Low 52WL Date Diff from

52WL

All Time

High

ATH Date Diff from ATH

Container Corporation Of India 1230.0 Jun 4 2013 -15% 891.1 Dec 10 2012 17% 1500 Apr 22 2010 -30%

Blue Dart Express 2755.0 May 31 2013 -20% 1530.8 Sep 4 2012 44% 2755 May 31 2013 -20%

Great Eastern Shipping Co 291.5 Dec 19 2012 -14% 199.3 Jun 24 2013 26% 572 Dec 31 2007 -56%

Redington India 92.8 Dec 18 2012 -36% 52.1 Jul 25 2013 14% 102 Jul 29 2011 -42%

Shipping Corporation of India 61.0 Jan 8 2013 -50% 27.9 Aug 2 2013 10% 221.33 Jan 3 2008 -86%

Gateway Distriparks 150.4 Oct 4 2012 -28% 98.3 Jul 31 2013 9% 241 Nov 14 2005 -55%

Allcargo Logistics 151.8 Feb 22 2013 -49% 64.8 Jul 30 2013 19% 271.02 Jan 12 2007 -71%

Aegis Logistics 210.7 Dec 7 2012 -48% 100.3 Aug 2 2013 10% 416.8 Oct 12 2010 -74%

Transport Corporation of India 89.7 Dec 12 2012 -50% 46.2 Jul 31 2013 -3% 185 Jan 1 2008 -76%

Sical Logistics 75.8 Feb 7 2013 -23% 57.5 Jun 26 2013 1% 574.75 May 3 2006 -90%

Essar Shipping 35.4 Aug 7 2012 -61% 14.5 Jun 28 2013 -6% 95 Nov 15 2011 -19%

Mercator 23.4 Oct 5 2012 -56% 9.6 Jul 31 2013 8% 184.95 Jan 3 2008 -40%

Gati 45.9 Oct 9 2012 -46% 22.7 Aug 2 2013 9% 215.2 Jan 2 2008 -79%

Chart.Logistics 21.3 Nov 13 2012 -50% 5.8 May 20 2013 83% 61.5 Sep 28 2011 -6%

Arshiya International 148.9 Oct 4 2012 -93% 11.0 Aug 2 2013 0% 424 Jan 10 2008 -97%

ABC India 171.0 Jan 23 2013 -33% 97.2 Jul 3 2013 18% 175.4 Nov 9 2010 -34%

Shreyas Shipping 43.1 Aug 17 2012 -51% 17.1 Jul 31 2013 23% 290 May 9 2006 -93%

Kesar Terminals 80.0 Oct 9 2012 -30% 46.6 Aug 2 2013 20% 129.4 Jan 5 2011 -57%

No scrip hit a 52 week high last month, while 5 hit new 52 week lows



FINANCIAL RESULTS

JFM'13 JFM'12 YoY (%) JFM'13 JFM'12 YoY (%) JFM'13 JFM'12 YoY (%) EBITDA PAT

Container Corporation Of India 11,945.4 10,369.5 15.2 2,714.2 2,671.5 1.6 2,464.7 2,451.3 0.5 22.7 20.6

Blue Dart Express 4,531.9 4,300.6 5.4 480.2 557.9 (13.9) 406.5 406.3 0.0 10.6 9.0

Great Eastern Shipping Co 7,324.1 8,024.2 (8.7) 3,377.9 2,833.3 19.2 2,449.8 1,809.9 35.4 46.1 33.4

Redington India 60,200.9 53,715.3 12.1 1,301.9 1,425.5 (8.7) 608.5 634.5 (4.1) 2.2 1.0

Shipping Corporation of India 9,176.5 11,549.5 (20.5) 851.8 973.7 (1,124.8) (815.4) 9.3 (12.3)

Gateway Distriparks 2,453.4 2,320.7 5.7 604.4 644.7 (6.3) 300.1 352.0 (14.7) 24.6 12.2

Allcargo Logistics 9,789.0 9,754.0 0.4 883.0 1,132.0 (22.0) 386.6 576.1 (32.9) 9.0 3.9

Aegis Logistics 8,063.7 14,841.7 (45.7) 243.6 (245.0) (199.4) 143.0 48.1 197.3 3.0 1.8

Transport Corporation of India 4,776.8 4,573.9 4.4 336.1 373.4 140.1 133.6 7.0 2.9

Sical Logistics 1,970.5 1,751.2 12.5 240.4 218.6 10.0 (12.3) 13.7 (189.8) 12.2 (0.6)

Essar Shipping 4,674.6 9,134.1 (48.8) 1,733.5 2,402.9 (27.9) 194.1 539.0 (64.0) 37.1 4.2

Mercator 7,202.5 10,952.0 (34.2) 1,398.9 1,750.0 (20.1) (33.9) 170.7 (119.9) 19.4 (0.5)

Gati 3,205.6 2,876.7 11.4 160.0 (133.3) (220.0) 67.0 394.6 (83.0) 5.0 2.1

Chart.Logistics 431.0 708.2 (39.1) 56.4 118.9 (52.6) 5.6 40.0 (86.0) 13.1 1.3

Arshiya International 1,602.9 3,124.5 (48.7) (394.5) 801.4 (149.2) (1,215.7) 308.7 (493.8) (24.6) (75.8)

ABC India 438.6 475.0 (7.7) 25.7 53.5 (52.0) (19.7) 0.7 (2,914.3) 5.9 (4.5)

Shreyas Shipping 964.3 813.8 18.5 (63.8) 73.2 (187.2) 28.7 67.4 (57.4) (6.6) 3.0 Kesar Terminals 81.2 63.8 27.3 49.4 39.2 26.0 26.0 20.5 26.8 60.8 32.0

Margins (%)Revenue (Rs mn) EBITDA (Rs mn) PAT (Rs Mn)

*Arshiya results are for Mar’13 quarter

Financial results for the quarter ending June’13 were nothing to cheer about. Aggregate sales of the lot above were down by 7%, EBITDA margins contracted, while net profit fell over 30%.

FY13 FY12 YoY (%) FY13 FY12 YoY (%) FY13 FY12 YoY (%) EBITDA PAT

Container Corporation Of India 44,448.1 41,008.3 8.4 10,493.8 10,234.5 2.5 9,306.1 8,656.6 7.5 23.6 20.9

Blue Dart Express 21,620.6 17,166.3 0.8 2,618.5 2,069.9 1.2 1,886.6 1,469.1 2.7 12.1 8.7

Great Eastern Shipping Co 29,820.5 29,342.5 1.6 11,030.8 10,657.7 3.5 5,377.6 3,165.5 69.9 37.0 18.0

Redington India 2,41,644.5 2,11,928.0 14.0 6,370.0 6,041.8 5.4 3,231.1 2,927.4 10.4 2.6 1.3

Shipping Corporation of India 41,525.2 38,208.0 8.7 2,112.6 (233.9) n.a (1,143.1) (4,282.1) n.a 5.1 (2.8)

Gateway Distriparks 9,497.3 8,173.0 16.2 2,397.5 2,442.6 (1.8) 1,360.2 1,356.2 0.3 25.2 14.3

Allcargo Logistics 39,254.0 42,711.5 (8.1) 3,553.8 5,197.0 (31.6) 1,823.3 2,976.9 (38.8) 9.1 4.6

Aegis Logistics 39,812.9 44,634.8 (10.8) (1,003.5) (41.3) n.a 351.5 223.8 57.1 (2.5) 0.9

Transport Corporation of India 21,290.7 19,537.5 9.0 1,717.4 1,564.5 9.8 695.3 593.4 17.2 8.1 3.3

Sical Logistics 7,604.8 7,796.3 (2.5) 888.6 833.3 6.6 69.9 156.1 (55.2) 11.7 0.9

Essar Shipping 31,766.4 27,820.3 14.2 6,934.2 6,800.2 2.0 358.0 368.3 (2.8) 21.8 1.1

Mercator 37,333.5 36,999.1 0.9 2,616.5 5,829.1 (55.1) (4,924.8) 301.4 n.a 7.0 (13.2)

Gati 11,757.1 12,029.8 (2.3) 522.6 924.6 (43.5) 415.1 141.0 194.4 4.4 3.5

Chart.Logistics 2,501.2 2,569.2 (2.6) 256.8 322.1 (20.3) 28.2 57.4 (50.9) 10.3 1.1

Arshiya International 11,394.1 10,493.4 8.6 1,708.9 2,636.7 (35.2) (1,271.5) 1,208.0 n.a 15.0 (11.2)

ABC India 1,800.5 2,582.0 (30.3) 115.5 241.2 (52.1) 61.9 48.6 27.4 6.4 3.4

Shreyas Shipping 3,848.5 2,704.9 42.3 376.2 239.2 57.3 154.0 56.3 173.5 9.8 4.0

Kesar Terminals 295.2 233.0 26.7 144.0 108.1 33.2 83.9 70.8 18.5 48.8 28.4

Revenue (Rs mn) EBITDA (Rs mn) PAT (Rs Mn) Margins (%)



VALUATIONS

Market Cap (Rs

mn) EV (Rs mn) P/E (x) EV/ EBITDA (x) P/CEPS (x) P/Sales (x)

Container Corporation Of India 1,35,901 1,06,739 14.6 10.2 12.3 3.1

Blue Dart Express 52,183 49,534 27.7 18.9 23.4 2.4

Great Eastern Shipping Co 38,347 85,870 7.1 7.8 3.4 1.3

Redington India 23,604 40,284 7.3 6.3 6.5 0.1

Shipping Corporation of India 14,253 63,059 -12.5 29.8 2.2 0.3

Gateway Distriparks 11,662 13,255 8.6 5.5 5.7 1.2

Allcargo Logistics 9,849 15,781 5.4 4.4 3.0 0.3

Aegis Logistics 3,686 6,710 10.5 -6.7 6.8 0.1

Transport Corporation of India 3,276 3,490 4.7 2.0 2.8 0.2

Sical Logistics 3,225 8,436 46.1 9.5 7.2 0.4

Essar Shipping 2,798 48,568 7.8 7.0 0.7 0.1

Mercator 2,530 33,774 -0.5 12.9 -5.6 0.1

Gati 2,139 5,355 5.2 10.2 2.7 0.2

Chart.Logistics 1,044 2,004 37.0 7.8 7.3 0.4

Arshiya International 682 27,063 -0.5 15.8 -1.0 0.1

ABC India 623 1,373 10.1 11.9 4.0 0.3

Shreyas Shipping 460 1,696 3.0 4.5 1.6 0.1

Kesar Terminals 294 535 3.5 3.7 2.7 1.0

Kesar Terminal continues to remain among the cheapest stocks in the logistics universe. While its small market cap will remain a deterrent for most investors, fundamentally it is cheap, and a potential multi-bagger. There is considerable interest in liquid logistics space, which is the main business of Kesar. Transport Corporation is beginning to look very cheap, particularly after it seems to have brought down net debt in FY13. As we have pointed out earlier, Gateway Distriparks is a high quality stock which is quite cheap, particularly after it has announced plans to lists its cold chain subsidiary



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