Buy Allcargo Global; target of Rs 249: BP Equities

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Buy Allcargo Global; target of Rs 249: BP Equities

BP Equities is bullish on Allcargo Global Logistics and has recommended buy rating on the stock with a target of Rs 249 in its August 22, 2011 research report.

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BP Equities is bullish on Allcargo Global Logistics and has recommended buy rating on the stock with a target of Rs 249 in its August 22, 2011 research report.

"Allcargo Global Logistics Ltd. (Allcargo) reported strong growth in revenues and profitability in Q2CY11. Top line increased by 33.5% YoY (+16.8% QoQ) to Rs 8.5bn on the back robust sales growth (+35.4% YoY) of ECU Line during the quarter. Volume at JNPT CFS increased by 8% YoY to 34,810 TEUs. Chennai and Mundra CFS registered strong growth in volume and increased by 21% to 21,337 TEUs and by 51% to 7,403 TEUs respectively during the quarter. Total volume in consolidated MTO segment increased by 16% YoY to 60,397 TEUs in Q2CY11. Project & Engineering solution registered 17% YoY increase in revenues to 792mn. While EBITDA margin improved by 150bps YoY to 12%, net profit margin improved by 175bps YoY to 7.8% in Q2CY11."

"In Q2CY11, Allcargo reported 33.5% YoY increase in top line to Rs 8.5bn mainly due to robust sales growth of ECU Line and CFS segment. ECU Line registered a 35.4% YoY growth in revenues to 6.1bn. Revenues from CFS segment increased by 60.3% YoY (+14.7% QoQ) to Rs 732.1mn primarily on the back of 16% YoY increase in total volume to 63,550 TEUs. Mundra CFS registered strong increase in volume (+51% YoY to 7,403 TEUs)."

"In Q2CY11, EBITDA margin improved by 150bps YoY to 12% on the back of various cost reduction measures as well as rationalization of procurement system in ECU Line. EBIT margin in CFS segment improved by 800bps to 52% during the quarter. Adjusted net profit increased by 73% YoY (+33.3% QoQ) to Rs 664mn. Net profit margin improved by 175bps YoY (+95bps QoQ) to 7.8% during the quarter. Effective tax rate decreased to 13.8% mainly due to higher contribution from CFS segment on MAT entitlement," says BP Equities research report.

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