Snowman Logistics : IPO analysis by Hem Securities
"Snowman Logistics is bringing the issue at price band of Rs 44-47 per share which will turn out at a p/e multiple of 32-34 on post issue FY’14 eps of Rs 1.40. The company has grown at CAGR of more than 50% in its bottomline from Fy’10 to Fy’14 while topline of company has registered CAGR of more than 40% during the same period. Also, company has posted strong operating & Net profit margin. With the strong growth prospects of cold chain industry & company being a leading integrated cold chain player in India with presence across the value chain of the industry ,the issue looks attractive destination to deploy the funds. Hence we recommend ”Subscribe” the issue for investment purpose," says Hem Securities research report.
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Company commenced its business as a trader of frozen marine products and in Fiscal 1998, company commenced cold storage operations at 4 (four) locations. Company’s operations can be classified into the following business segments:
1. Temperature controlled services; and
2. Ambient distribution.
While in previous financial years it only operated in the temperature controlled services and ambient distribution business segments, company have, in Fiscal 2014, commenced ambient warehousing as well. Co’s warehousing solutions cover the complete spectrum of temperature ranges from ambient to chilled and frozen (i.e. +20ºC to -25ºC).
Company offers blast freezing facilities at its temperature controlled warehouses in Bengaluru, Mevalurkuppam, (near Chennai), Visakhapatnam, Serampore (near Kolkata), Taloja (near Mumbai), Ahmedabad, Palwal (near Delhi), Mubarakpur (near Chandigarh) and Surat. Co’s integrated ‘Source to Stores’ operations comprise warehousing, primary distribution and secondary distribution and value-added services including kitting, labelling, sorting and bulk breaking.
As of March 31, 2014, company’s operations comprised 23 temperature controlled warehouses across 14 locations in India including Serampore (near Kolkata), Taloja (near Mumbai), Palwal (near Delhi), Mevalurkuppam, (near Chennai) and Bengaluru capable of warehousing 58,543 pallets and 3,000 ambient pallets. Further, as of Fiscal 2014, company operated 370 Reefer Vehicles consisting of 307 leased and 63 owned vehicles. As of March 31, 2014, company engaged a total workforce of 1,490 including 383 permanent employees and 1,107 on a contract labour basis.
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