Buy Arshiya International; target of Rs 223: SKP Securities

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Buy Arshiya International; target of Rs 223: SKP Securities

SKP Securities is bullish on Arshiya International and has recommended buy rating on the stock with a target of Rs 223 in its August 8, 2011 research report.

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SKP Securities is bullish on Arshiya International and has recommended buy rating on the stock with a target of Rs 223 in its August 8, 2011 research report.

"Arshiya International Ltd (AIL), a flagship company of Arshiya group, having a 10 years lineage in logistics, is an integrated supply chain and logistics infrastructure solutions provider headquartered in Mumbai, India. Arshiya International Ltd had taken its initiative to develop India's first Free Trade Warehousing Zone (FTWZ) at Panvel, Mumbai spanning across 165 acres. AIL has entered into various verticals such as FTWZs, Domestic Distriparks, Rail Business etc."

"Arshiya International Ltd has taken initiative to establish India's first FTWZ. It started its first FTWZ at Panvel, Mumbai in Nov 2010 spanning across 165 acres. AIL is also in process of setting up second FTWZ at Delhi, followed by Nagpur and two more at South and East. These five FTWZs set up at strategic locations across India will bring about a revolutionary change in the Indian logistics landscape. We expect this segment to generate revenue of Rs. 146 crore and Rs. 512 crore For FY12E and FY13E respectively. AIL has planned an investment of Rs. 626 crore for its Rail Infrastructure project, phased over the next two years. Currently company is operating fifteen rakes; AIL plans to expand the rakes to 22 and 30 by FY12E and FY13E respectively. We estimate AIL's Railway business's sales to grow at a 36% CAGR in FY11-FY13E."

"At current market price of Rs. 138-, AIL is trading at P/E of 8.2x and 5.0x of FY12E and FY13E earnings of Rs. 16.8 and 27.8 respectively. We recommend BUY rating on the stock with a target price of Rs. 223/- (62% upside) in 15 months at the P/E of 8x on FY13 earnings," says SKP Securities research report. 

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