Kotak Securities is bullish on Allcargo Logistics has recommended buy rating on the stock with a target price of Rs 250 in its research report dated January 04, 2018.
Kotak Securities' research report on Allcargo Logistics
Strong relationship with shipping lines, vast experience and wide network in the Multimodal Transport (MTO) segment, global presence, experienced management team and efforts taken by the company to improve operational performance have translated in strong operational performance for ALL in H1FY18 despite weak global container trade. Also with significant International operations (MTO segment), B2B clients and 100% e-payments systems would provide impetus to growth under GST. New container freight station (CFS) in Kolkata, value accretive small acquisitions in the MTO segment, improved utilization in the projects division and rational steps to bring down operational cost would enable the company to maintain margins at ~8.8% and earnings CAGR of 14.5% over FY17 to FY20E. We also estimate ALL to be the biggest beneficiary of any recovery in trade and GST implementation. We introduce FY20 numbers and increased the TP to Rs 250 at 18x FY20E (from Rs 205) and maintain BUY on the stock.
Broadly we estimate an earnings CAGR of 14.5% over FY17 to FY20E with improvement in margins and return ratios. We introduce FY20 numbers and increased the TP to Rs 250 at 18x FY20E (from Rs 205) and maintain BUY on the stock.
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