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Sep 20, 2012, 02.29 PM IST | Source: Moneycontrol.com

Buy Gati; target of Rs 43: Firstcall Research

Firstcall Research is bullish on Gati and has recommended buy rating on the stock with a target of Rs 43 in its September 15, 2012 research report.

Firstcall Research is bullish on Gati and has recommended buy rating on the stock with a target of Rs 43 in its September 15, 2012 research report.

“Gati Limited is a pioneer and leader in the Express Distribution and Supply Chain Solutions in India. It was the revolutionary approach adopted by Gati that helped launch many path-breaking initiatives in the logistics segment and many were the firsts for the Indian market. Having started as a cargo management company in 1989, Gati has grown into an organization with more than 3500 employees and a turnover of Rs 576Crore covering 603 out of 611 districts in India. Gati has over 4000 vehicles on road, fleet of refrigerated trucks, container vessels and world class mechantronic warehousing facilities across India. Gati was also the first to run the millenium parcel express train in October 2001 between Mumbai and Kolkata with 10 VPUs. The initiative to run a parcel express train between KYN (Mumbai) and NGC (Guwahati) was again taken by Gati - this is a classic example of PPP (Public Private Partnership).”

“Gati has over 4000 vehicles on road, fleet of refrigerated trucks, container vessels and world class mechantronic warehousing facilities across India. Reported its financial results for the quarter ended 30th June, 2012. The fourth quarter witnesses a healthy increase in profit & slightly slept in sales on account, an enhanced Dealers network and robust infrastructural Support system. The company’s net profit jumps to Rs.638.10 million against Rs.32.00 million in the corresponding quarter ending of previous year, an increase of 1894.06%. Revenue for the quarter rust by 92.92% to Rs.158.90 million from Rs.2245.20 million, when compared with the prior year period. Reported earnings per share of the company stood at Rs.7.37 a share during the quarter, registering 1880.25% increase over previous year period. Profit before interest, depreciation and tax is Rs.872.60 millions as against Rs.234.20 millions in the corresponding period of the previous year.”

“During the quarter variable cost rust by 89 per cent mainly on account of decrease in Operating Expenses along with consideration of depreciation in the rupee impact. Total expenditure in Q4 FY12 was at 227.30 million as against Rs.2071.10 million in Q4 FY 11. Operating Expenses Rs. 161.40 against Rs. 1483.60 millions in the corresponding period of the previous year. Other Expenditure was at Rs. 35.00 million and Employee benefit expenses is Rs. 24.90 million in Q4FY12 are the primarily attributable to decline of expenditure.The fourth quarter witnesses a healthy increase in overall sales as well as profitability on account of powerful combination of exciting products, an enhanced store network and robust infrastructural Support system. We expect that the company surplus scenario is likely to continue for the next three years, will keep its growth story in the coming quarters also. We recommend ‘BUY’ in this particular scrip with a target price of Rs.43.00 for Medium to Long term investment,” says Firstcall Research report. 

Public holding more than 90% in Indian cos

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