Buy Arshiya Int; target of Rs 195: Sunidhi Securities

Sunidhi Securities is bullish on Arshiya International and has recommended buy rating on the stock with a target of Rs 195 in its May 15, 2012 research report.

“Arshiya International (AIL_, sales during Q4FY12 rose 32.2% to Rs309.9 crore (Rs234.4 crore). PBIDT at Rs75.3 crore (Rs52.1 crore) rose 44.5%. Net profit advanced 43.0% to Rs27.6 crore from Rs19.3 crore in Q4FY11 (YoY).  OPM stands enhanced to 24.3% from 22.2% and PAT margin moved up to 8.9% from 8.2% in Q4FY11.  EPS for Q4FY12 stands at Rs4.7 Vs Rs3.3 in Q4FY11. During FY12, sales rose 27.4% to Rs1046.8 crore (Rs821.5 crore). PBIDT at Rs277.8 crore (Rs161.4 crore) rose 72.1%. Net profit rose 43.4% to Rs117.6 crore from Rs82.0 crore in FY11 (YoY).  OPM enhanced to 26.5% from 19.6% and PAT margin moved up to 11.2% from 10.0% in FY11.  EPS for FY12 stands at Rs19.9 Vs Rs13.9 in FY11.”

“Incorporated in 1981, Arshiya International (AIL) is an integrated supply chain and logistics infrastructure solutions provider headquartered in India. It has multinational operations in the logistics and supply chain management space and is currently involved in the phased investment of approximately USD 1.6 billion towards creating and pioneering logistics infrastructure within India.  AIL’s strategically integrated logistics verticals are: Free Trade and Warehousing Zones (FTWZ), Rail Infrastructure, Domestic Distriparks, Logistics, Supply Chain Management, Transport & Handling and Information Technology. These verticals enable unparalleled operational expertise & solution capability across the entire supply chain spectrum. Arshiya has been accorded the status of “Star Export House” in accordance with the provisions of the Foreign Trade Policy.”

“Recognizing the need in the logistics space, AIL operates with the mission of becoming the first and only company to address challenges of supply chain solutions, Rail infrastructure, domestic distriparks (logistics parks), and FTWZs with an integrated focus on Infrastructure, Innovation, Investment, Integration & IT.  The integrated nature of AIL’s play is taking away all hassles of logistics. AIL has customers from across the globe who today don’t even have a permanent establishment status and have equipment or their product lying in AIL’s FTWZ- where it handles freight forwarding for them- bringing the product, transporting to the FTWZ, warehousing the product, doing value added services and distributing the product to their customers in India who will buy from them or using India as a hub to distribute products again in other parts of Asia Pacific and Middle East.”

“At the CMP of Rs138, the share is trading at a P/E of 6x on FY13 EPS to Rs23.1 and 5.3x on FY14E Rs26.0. We reiterate BUY rating on the scrip with our target price of Rs195, at which it will trade at a P/E of 7.5x on FY14 EPS of Rs26.0,” says Sunidhi Securities research report.

Non-Institutions holding more than 90% in Indian cos

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