November 24, 2016 / 16:57 IST
Allcargo’s (AGLL) EBITDA declined 6% YoY (-3% QoQ) to INR 1.26 b (est. of INR 1.27 b) due to slowdown in the project logistics business and transfer of certain business in JV. Reported EBIT stood at INR 827 m (est. of INR 830 m; +5% YoY; -4% QoQ), while PAT was INR 643 m (est. of INR 630 m; +6% YoY; +3% QoQ) driven by a lower tax rate of 21.7% (est. of 28%; 29% in 1QFY17).
With (a) current businesses largely in steady state and minimal capex requirement and (b) strong balance sheet and 8-9% FCF yield, AGLL is well placed to invest in DFC/GST-led opportunities. We value AGLL at FY18E EV/EBITDA of 8.5x and arrive at fair value of INR 196. On FY18E, the stock trades at P/E of 12.8x and EV/EBITDA of INR 6.4x. Maintain Buy.
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